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You are asked to evaluate the following 2 projects for the Norton corporation. Use a discount rate of 12%

project x.              Project Y

($16,000)               ($36,000)

year.   cash flow.    year.    cash flow

1.        $8,000.           1.       $ 18,000

2.         6,000.            2.         11,000

3.         7,000.            3.          12,000

4.         6,600.            4.         14,000

a. calculate the profitability index for project x

b. calculate the profitability index for project y

Financial Management, Finance

  • Category:- Financial Management
  • Reference No.:- M92871002

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