**Problem 1.** Creighton Company’s balance sheet and income statement are provided below:

Required:

1) Compute the margin, turnover, and return on investment for Creighton Company.

2) What is the advantage of expanding the ROI formula to measure margin and turnover separately?

**Problem 2.** Delta Company is evaluating two different capital investments, Project X and Y. Either X or Y would cost $100,000, and the company cannot afford to do both. The company expects that Project X would provide net cash inflows of $30,000 per year for 5 years. For Project Y, the net cash inflows are expected to be as follows:

Delta’s cost of capital is 12%

Required:

1) Calculate the present value index for Project X and for Project Y.

2) Indicate whether each of the projects is an acceptable investment.

3) Which of the two projects should Delta implement?