Yokam Company is considering two alternative projects. Project 1 requires an initial investment of $490,000 and has a present value of cash flows of $1,500,000.0. Project 2 requires an initial investment of $4,000,000 and has a present value of cash flows of $7,000,000. Project 2 requires an initial investment of $4 million and has a present value of cash flows of $6 million. Required:
Compute the profitability index for each project. Based on the profitability index, which project should the company prefer?

Label each of the following statements true, false, or uncertain. explain your choice carefully. a. workers benefit equally from the process of creative destruction. b. in the past two decades, the real wages of low-skill u.s. workers have declined relative to the real wages of high-skill workers. c. technological progress leads to a decrease in employment if, and only if, the increase in output is smaller than the increase in productivity. d. the apparent decrease in the natural rate of unemployment in the united states in the second-half of the 1990s can be explained by the fact that productivity growth was unexpectedly high during that period.