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Courtesy Caravan, Inc. may invest in only one of three new projects. Due to other capital constraints, they have decided to base their decision on
Courtesy Caravan, Inc. may invest in only one of three new projects. Due to other capital constraints, they have decided to base their decision on each project's profitability index. The company has a cost of capital of 9.0%. Cash Flows (millions) Year 0 Year Year 2 Year 3 Year 4 105 125 155 75 105 135 175 165 210 10 points ProjectA (230) Project B(275) Project C(330) 125 155 175 Skipped a. What is the profitability index for each project? (Round your answers to four decimal places.) PI Project A Project B Project C eBook References b. Which project should you select based upon the profitability index? O Project B Project A O ProjectC
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