Question details

You are asked to evaluate two projects for Adventures Club, Inc. Using the net present
$ 6.99

You are asked to evaluate two projects for Adventures Club, Inc. Using the net present value method combined with the profitability index approach described in footnote 2 on page ____, which project would you select? Use a discount rate of 12 percent.

Project X (trips to Disneyland) ($10,000 investment)

Project Y (international film festivals) ($22,000 investment)

Year

Cash Flow

Year

Cash Flow

1..............................

$4,000

1.................................

$10,800

2..............................

5,000

2.................................

9,600

3..............................

4,200

3.................................

6,000

4..............................

3,600

4.................................

7,000

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