**Current Attempt in Progress**

You are analyzing two proposed capital investments with the following cash flows:

Year |
Project X |
Project Y |
|||
---|---|---|---|---|---|

0 |
– $20,000 | – $20,000 | |||

1 |
12,530 | 6,570 | |||

2 |
6,360 | 6,570 | |||

3 |
6,160 | 6,570 | |||

4 |
2,020 | 6,570 |

The cost of capital for both projects is 10 percent.

Calculate the profitability index (PI) for each project. *(Do not round discount factors. Round intermediate calculations to 2 decimal places, e.g. 15.25 and final answer to 4 decimal places, e.g. 1.2527.)*

The PI for project X is enter the profitability index for project X rounded to 4 decimal places and the PI for project Y is enter the profitability index for project Y rounded to 4 decimal places . |

Which project, or projects, should be accepted if you have unlimited funds to invest?

If you have unlimited funds you should invest in select a project both projectsproject Yneither projectproject X. |

Which project should be accepted if they are mutually exclusive?

If they are mutually exclusive you should invest in select a project neither projectProject YProject X. |