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Jefferson International Is Trying to Choose Between the Following Two

Question 8

Multiple Choice

Jefferson International is trying to choose between the following two mutually exclusive design projects:  Year  Cash Flow  Cash (A)  Flow (B) 0$55,000$29,000112,30019,400215,10016,600350,000900\begin{array} { | r | r | r | } \hline \text { Year } & \text { Cash Flow } & \underline { \text { Cash } } \\&{ ( \mathrm { A } ) } & \underline { \text { Flow } ( \mathrm { B } ) } \\\hline 0 & - \$ 55,000 & - \$ 29,000 \\\hline 1 & 12,300 & 19,400 \\\hline 2 & 15,100 & 16,600 \\\hline 3 & 50,000 & 900 \\\hline\end{array} The required return is 13 percent.If the company applies the profitability index (PI) decision rule,which project should the firm accept? If the company applies the NPV decision rule,which project should it take?
Given your first two answers,which project should the firm actually accept?


A) Project A; Project B; Project A
B) Project A; Project B; Project B
C) Project B; Project A; Project A
D) Project B; Project A; Project B
E) Project B; Project B, Project B

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