14. The following information is available for a potential investment for Panda Company:

Initial investment	$100000
Net annual cash inflow	20000
Net present value	40150
Salvage value	10000
Useful life	10 yrs.

The potential investments profitability index is

5.00.

1.40.

3.33.

2.49.

15. Pina Colada Inc. is comparing several alternative capital budgeting projects as shown below:

	Projects
	A	B	C
Initial investment	$88000	$128000	$168000
Present value of net cash flows	98000	118000	208000

Using the profitability index, the projects rank as

C, B, A.

A, C, B.

A, B, C.

C, A, B.

16. Windsor Inc. is comparing several alternative capital budgeting projects as shown below:

	Projects
	A	B	C
Initial investment	$72000	$112000	$152000
Present value of net cash flows	82000	102000	192000

Using the profitability index, how many of the projects are acceptable?

2

3

1

0