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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: 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 $1.98 million 100% B $0.97 million 56% $1.46 million 44% a. What are the profitability indexes of the projects? b. What should Fabulous Fabricators do? a. What are the profitability indexes of the projects? The profitability index for contract Ais . (Round to two decimal places.) The profitability index for contract B is - (Round to two decimal places.) The profitability index for contract Cis(Round to two decimal places.) b. What should Fabulous Fabricators do? (Select the best choice below.) O A. It should take the two projects with the highest profitability indexes: C and A. O B. Since it has the capacity to do both B and C and NPV8 + NPVC is greater than NPVA, it should do both B and C. O C. Since the profitability index for C is the largest, it should choose C. O D. Since the NPV of A is the largest, it should choose A
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