Question
Fabulous Fabricators needs to decide how to allocate space in its production facility this year. It is considering the following contracts: contract NPV Use of
Fabulous Fabricators needs to decide how to allocate space in its production facility this year. It is considering the following contracts:
| contract | NPV | Use of Facility |
| A | $2.05 Million | 100% |
| B | $1.01 | 53% |
| C | $1.45 | 47% |
a. What are the profitability indexes of the projects?
b. What should Fabulous Fabricators do?
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Financial Management Theory And Practice
Authors: Eugene Brigham, Michael Ehrhardt, Jerome Gessaroli, Richard Nason
3rd Canadian Edition
017658305X, 978-0176583057
