Consider projects A and B with the following cash flows:
C0 C1 C2 C3
A − $ 27 + $ 16 + $ 16 + $ 16
B − 52 + 27 + 27 + 27
a-1. What is the NPV of each project if the discount rate is 10%? (Do not round intermediate calculations. Round your answers to 2 decimal places.)
Project NPV A $ B $
a-2. Which project has the higher NPV?
Project B Project A
b-1. What is the profitability index of each project? (Do not round intermediate calculations. Round your answers to 2 decimal places.)
Project Profitability index A B