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1 5 . Profitability Index versus NPV Hanmi Group, a consumer electronics conglomerate, is reviewing its annual budget in wireless technology. It is considering investments
Profitability Index versus NPV Hanmi Group, a consumer electronics conglomerate, is reviewing its annual budget in wireless technology. It is considering investments in three different technologies to develop wireless communication devices. Consider the following cash flows of the three independent projects available to the company. Assume the discount rate for all projects is percent. Further, the company has only $ million to invest in new projects this year. Cash Flows in millions Year CDMA G WiFi $$ a Based on the profitability index decision rule, rank these investments. b Based on the NPV rank these investments. c Based on your findings in partsa and b what would you recommend to the CEO of the company and why
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