Dahlia Manufacturing has the following two possible projects. The required return is 11 percent.
Year Project Y Project Z
0 –$28,000 –$60,000
1 14,000 17,000
2 12,400 31,000
3 14,800 15,000
4 10,400 29,000
Required: (a) What is the profitability index for each project? (Do not round intermediate calculations. Round your answers to 3 decimal places (e.g., 32.161).)
Profitability index
Project Y ________
Project Z ________
(b) What is the NPV for each project? (Do not round intermediate calculations. Round your answers to 2 decimal places (e.g., 32.16).)
NPV
Project Y $________
Project Z $ ________
(c) Which, if either, of the projects should the company accept? __________