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Question(s) / Instruction(s):

The Weiland Computer Corporation is trying to choose between the following two mutually exclusive design projects: 

Year       Cash Flow (I)      Cash Flow (II)

0              –$33,000              –$9,900     

1              18,000                   5,000     

2              18,000                   5,000     

3              18,000                   5,000    

The required return is 14 percent.

Required:

(a)          The profitability index for Projects I and II is ______and_______, respectively.

(b)          The NPV for Projects I and II is $ ______ and $_______, respectively. If Weiland on Computer applies the NPV decision rule, it should accept Project_______.

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