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Business, 27.04.2021 15:20 RoyalGurl01

McKnight Company is considering two different, mutually exclusive capital expenditure proposals. Project A will cost $411,000, has an expected useful life of 11 years, a salvage value of zero, and is expected to increase net annual cash flows by $71,000. Project B will cost $273,000, has an expected useful life of 11 years, a salvage value of zero, and is expected to increase net annual cash flows by $48,800. A discount rate of 10% is appropriate for both projects. Compute the net present value and profitability index of each project. (If the net present value is negative, use either a negative sign preceding the number eg -45 or parentheses eg (45). Round present value answers to o decimal places, e. g. 125 and profitability index answers to 2 decimal places, e. g. 15.25. For calculation purposes, use 5 decimal places as displayed in the factor table provided.) Net present value - Project A Profitability index - Project A Net present value - Project B s Profitability index - Project B Which project should be accepted based on Net Present Value?

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McKnight Company is considering two different, mutually exclusive capital expenditure proposals. Pro...

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