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The Matterhorn Corporation is trying to choose between the following two mutually exclusive design projects: Year Cash Flow (I) Cash Flow (II) 0 –$83,000 –$41,000 1 32,900 12,900 2 43,000 30,500 3 49,000 24,500 Requirement 1: (a) If the required return is 16 percent, what is the profitability index for each project? (Do not round intermediate calculations. Round your answers to 3 decimal places (e.g., 32.161).) Profitability index Project I Project II (b) If the required return is 16 percent and the company applies the profitability index decision rule, which project should the firm accept? Requirement 2: (a) If the required return is 16 percent, what is the NPV for each project? (Do not round intermediate calculations. Round your answers to 2 decimal places (e.g., 32.16).) Net present value Project I $ Project II $ (b) If the company applies the NPV decision rule, which project should it take?

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