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Unformatted text preview: 1 ($30,000.00) $15,000.00 $15,000.00 $15,000.00 10% $37,302.78 1.24 $7,302.78 2 ($5,000.00) $2,800.00 $2,800.00 $2,800.00 10% $6,963.19 1.39 $1,963.19 a. According to the PI decision rule, Robb Computer should accept Project 2 because it has the higher PI. b. According to the NPV decision rule, Robb Computer should accept Project 1 because it has the higher NPV. c. The PI ignores differences of scale for mutually exclusive projects. The PI for Project 2 is higher than Project 1; thus, because the PI is a ratio, the index misses the fact that Project 1 has a larger investment than Project 2 has....
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- Spring '08