Project Q Has an Initial Cost of $257,412 and Projected

Multiple Choice

Project Q has an initial cost of $257,412 and projected cash flows of $123,300 in Year 1 and $180,300 in Year 2.Project R has an initial cost of $345,000 and projected cash flows of $184,500 in Year 1 and $230,600 in Year 2.The discount rate is 12.2 percent and the projects are independent.Which project(s) ,if either,should be accepted based on its profitability index value?

A) Accept both Project Q and R
B) Reject both Project Q and R
C) Accept Project Q and reject Project R
D) Accept Project R and reject Project Q
E) Accept either Project R or Project Q,but not both