ou are asked to evaluate the following two projects for the Norton corporation. Use a discount
rate of 11 percent. Use Appendix B for an approximate answer but calculate your final answer
using the formula and financial calculator methods.
a. Calculate the profitability index for project X. (Do no t round intermediate calculations and
round your answer to 2 decimal places.)
b. Calculate the profitability index for project Y. (Do not round intermediate calculations and
round your answer to 2 decimal places.)
c. Which project would you select based on the profitability index?
Project X (Videotapes Project Y (Slow-Motion
of the Weather Report) Replays of Commercials)
($22,000 Investment) ($42,000 Investment)
Year Cash Flow Year Cash Flow
1 $ 11,000 1 $ 21,000
2 9,000 2 14,000
3 10,000 3 15,000
4 9,600 4 17,000.
ou are asked to evaluate the following two projects for the Norton cor.pdf
1. ou are asked to evaluate the following two projects for the Norton corporation. Use a discount
rate of 11 percent. Use Appendix B for an approximate answer but calculate your final answer
using the formula and financial calculator methods.
a. Calculate the profitability index for project X. (Do no t round intermediate calculations and
round your answer to 2 decimal places.)
b. Calculate the profitability index for project Y. (Do not round intermediate calculations and
round your answer to 2 decimal places.)
c. Which project would you select based on the profitability index?
Project X (Videotapes
of the Weather Report)
($22,000 Investment)
Project Y (Slow-Motion
Replays of Commercials)
($42,000 Investment)
Year Cash Flow Year Cash Flow
1 $ 11,000 1 $ 21,000
2 9,000 2 14,000
3 10,000 3 15,000
4 9,600 4 17,000
