Question
Contract NPV Use of Facility A 1.96 1 B 1.02 0.6 C 1.51 0.4 Fabulous Fabricators needs to decide how to allocate space in its
Contract NPV Use of Facility A 1.96 1 B 1.02 0.6 C 1.51 0.4
Fabulous Fabricators needs to decide how to allocate space in its production facility this year. It is considering the following contracts:
a. What are the profitability indexes of the projects?
The profitability index for contract A is:
The profitability index for contract B is:
The profitability index for contract C is:
(Round to two decimal places.)
b. What should Fabulous Fabricators do?
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Accounting Principles Volume 1
Authors: Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel, Barbara Trenholm, Valerie Warren, Lori Novak
8th Canadian Edition
978-1119502425
