Cori's Sausage Corporation is trying to choose between the following two mutually exclusive design projects:

Year    Cash Flow (l)            Cash Flow (ll)

0             -$65,000               -$ 17,900

1               30,000                    9,650

2                30,000                   9,650

3                 30,000                  9,650

a-1. If the required return is 12 percent, what is the profitability index for each project? (Do not round intermediate calculations and round your answers to 3 decimal places, e.g., 32.161.) Profitability Index

Project I     ____

Project II ______

a-2. If the company applies the profitability index decision rule, which project should the firm accept?

Project I

Project II

b-1. What is the NPV for each project? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

Project I $ ____

Project II $____

b-2. If the company applies the NPV decision rule, which project should it take?

Project I

Project II