The profitability indexes for three alternative investment projects follow. Each project has a five-year life. (a) Which
Question:
The profitability indexes for three alternative investment projects follow. Each project has a five-year life.
(a) Which project(s) will the company accept on the basis of profitability index?
(b) If the company can choose only one project, which will it choose?
Transcribed Image Text:
Potential Projects Project A Project B Project C Profitability index 0.80 1.40 1.20
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 66% (9 reviews)
a B and C are accepted A profitability index greater than one i...View the full answer
Answered By
Muhammad Khurram
I have strong General Management skills to apply in your projects. Over last 3 years, I have acquired great knowledge of Accounting, Auditing, Microsoft Excel, Microsoft PowerPoint, Finance, Microsoft Project, Taxation, Strategic Management, Human Resource, Financial Planning, Business Planning, Microsoft Word, International Business, Entrepreneurship, General Management, Business Mathematics, Advertising, Marketing, Supply Chain, and E-commerce. I can guarantee professional services with accuracy.
4.80+
249+ Reviews
407+ Question Solved
Related Book For
Question Posted:
Students also viewed these Business questions
-
A company is considering three alternative investment projects with different net cash flows. The present value of net cash flows is calculated using Excel and the results follow. a. Compute the net...
-
Internal rates of return for three alternative investment projects follow. Each project has a five-year life. The company requires a 12% rate of return on its investments. (a) Which project(s) will...
-
Net present values for three alternative investment projects follow. (a) If the company accepts all positive net present value investments, which of these projects will it accept? (b) If the company...
-
The position of a particle moving along 12t2 2t, where r is in meters and t is in an r-axis is given by x = seconds. i Determine the acceleration of the particle at t = 3.0 s. ii What are the...
-
Calculate the amount of work input a refrigerator needs to make ice cubes out of a tray of 0.25 kg liquid water at 10oC. Assume the refrigerator works in a Carnot cycle between 8oC and 35oC with a...
-
The 2010 accounting records of Star Records showed the following: Cash, \($15,000;\) Net Accounts Receivable, \($8,000;\) Inventory, \($5,000;\) Prepaid Expenses, \($4,000;\) Net Plant and Equipment,...
-
Much of the information contained in the balance sheet is reported on a historical cost basis. This means that such assets as land are reported at the amount that was originally paid for the item...
-
Thompson Distributors packages and distributes industrial supplies. A standard shipment can be packaged in a class A container, a class K container, or a class T container. A single class A container...
-
Three Sisters & Co. is considering Projects S and L, whose cash flows are shown below. These projects are mutually exclusive, equally risky, and not repeatable. If the decision is made by choosing...
-
Stewart Recording Studio, owned by Ron Stewart, showed the following bank reconciliation at March 31: A list of deposits made and cheques written during April, taken from the cash receipts journal...
-
Refer to the information in Exercise 26-6. B2B Co. requires at least an 8% return on this investment. (a) Compute the net present value of this investment. (b) Should the investment be accepted on...
-
Following is information on two alternative investments. Beachside Resort is considering building a new pool or spa. The company requires a 10% return from its investments. For each investment...
-
On June 1, 20X13, Gary gave Gertrude a gift of stock worth $10,000, paying no gift tax on the transaction. Gary had purchased the stock for $7,500 in 20X11. On October 1, 20X13, Gertrude sold the...
-
Part A. What would be the required rate of return on an investment in an economy with a 3% real rate of return, expected inflation of 4%, and a risk premium of 4%? What would you expect $1000...
-
How have information systems changed the way businesses operate and their products and services? labor efficiency is considered a major component of the learning curve concept.Furthermore labor...
-
Salaries represent the costs of employing two new machine operators at a salary of $40,000 per annum each. For the HCC machine, the company will only need to employ a new machine operator and the...
-
Compare and contrast the use of job evaluation methodologies and market pricing to determine salary levels. What are the advantages and disadvantages of each, and when would each be appropriate?...
-
Grant & Krewstown Inc. also records $420,000 in Net Income and pays dividends of $14,000. Assuming this is the company's first year of operations, what is Total Stockholders' Equity? 1000
-
R. Wilson Ascots, a retailer of collegiate neckwear, has completed the sales forecast for the coming year. R. Wilson Ascots maintains an ending inventory level of 60% of the following month's cost of...
-
For the following exercises, find the area of the triangle. Round to the nearest hundredth. 22 50 36
-
Use information in Exercise 19-7 to prepare journal entries for the following events for the month of May. 1. Raw materials purchases for cash. 2. Direct materials usage. 3. Indirect materialsusage....
-
Use information in Exercise 19-7 to prepare journal entries for the following events for the month of May. 1. Factory payroll costs in cash. 2. Direct labor usage. 3. Indirect laborusage. April 30...
-
Use information in Exercise 19-7 to prepare journal entries for the following events for the month of May. 1. Factory overhead excluding indirect materials and indirect labor (record credit to Other...
-
DLA Inc. was late filing their S corporation return for the current tax year. DLA filed its Form 1120-S on April 15, 2023, and mailed copies of the Schedule K-1s to each of its 50 shareholders on the...
-
14. The following table gives the number of heart failures experiences at a local hospital every week. It further shows the probability of each number of heart monitor failures. Determine the...
-
uppose you observe the following situation: Security Beta Expected Return Pete Corporation 1 . 0 5 . 1 1 5 Repete Company . 7 5 . 0 8 8 a . Assume these securities are correctly priced. Based on the...
Study smarter with the SolutionInn App