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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? Data table a. What are the profitability indexes of the projects? (Click on the following icon in order to copy its contents into a spreadsheet.) The profitability index for contract A is (Round to two decimal places.) Contract A B NPV $2.04 million $1.02 million $1.53 million Use of Facility 100% 58% 42% 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.) Print Done O A. Since the NPV of A is the largest, it should choose A. B. Since it has the capacity to do both B and C and NPVB + NPV 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. OD. It should take the two projects with the highest profitability indexes: C and A
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