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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
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? b. What should Fabulous Fabricators do? CIE a. What are the profitability indexes of the projects? The profitability index for contract A is (Round to two decimal places.) The profitability index for contract B is (Round to two decimal places.) The profitability index for contract C is. (Round to two decimal places.) b. What should Fabulous Fabricators do? (Select the best choice below.) OA. Since it has the capacity to do both B and C and NPVB + NPVC is greater than NPVA, it should do both B and C. OB. Since the profitability index for C is the largest, it should choose C. OC. It should take the two projects with the highest profitability indexes: C and A. O D. Since the NPV of A is the largest, it should choose A. Data table (Click on the following icon in order to copy its contents into a spreadsheet.) Contract A Use of Facility 100% NPV $1.98 million $1.04 million $1.51 million B 60% C 40% Print Done - X
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