Home / Questions / The treasurer of Amaro Canned Fruits Inc has projected the cash flows of projects A B and ...
The treasurer of Amaro Canned Fruits, Inc., has projected the cash flows of projects A, B, and C as follows: 
Year  Project A  Project B  Project C  
0  ?$  195,000  ?$  325,000  ?$  195,000  
1  145,000  238,000  155,000  
2  145,000  238,000  125,000  
Suppose the relevant discount rate is 12 percent a year. 
a. 
Compute the profitability index for each of the three projects. (Do not round intermediate calculations. Round your answers to 2 decimal places. (e.g., 32.16)) 
Profitability index 

Project A  
Project B  
Project C  
b. 
Compute the NPV for each of the three projects. (Do not round intermediate calculations. Round your answers to 2 decimal places. (e.g., 32.16)) 
NPV  
Project A  $ 
Project B  $ 
Project C  $ 
c. 
Suppose these three projects are independent. Which project(s) should Amaro accept based on the profitability index rule? 


d. 
Suppose these three projects are mutually exclusive. Which project(s) should Amaro accept based on the profitability index rule? 


e. 
Suppose AmaroAc€?cs budget for these projects is $520,000. The projects are not divisible. Which project(s) should Amaro accept? 


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