Question
A company seeking investment opportunities has collected the following information: Project A Project B Project C Project D Initial investment $400,000 $250,000 $150,000 $270,000 PV
A company seeking investment opportunities has collected the following information:
| Project A |
| Project B |
| Project C |
| Project D | |
| Initial investment | $400,000 |
| $250,000 |
| $150,000 |
| $270,000 |
| PV of cash inflows | $570,000 |
| $295,000 |
| $210,000 |
| $282,000 |
| Payback period (years) | 3.6 |
| 3.0 |
| 4.75 |
| 3.5 |
| NPV of project | $170,000 |
| $45,000 |
| $60,000 |
| $12,000 |
| Profitability index | 1.43 |
| 1.18 |
| 1.40 |
| 1.04 |
If the company makes a decision based on the net present value, which project will be selected?
A. Project A
B. Project B
C. Project C
D. Project D
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Internal Auditing Basics Video Learning Guide
Authors: Charles A. Cianfrani & John E. West, James P. Gildersleeve
1st Edition
1891578251, 978-1891578250
