Question
Given the following information, in which order would you choose the following projects based on the profitability index? Project A (NPV of cash flows: $190,000,
Given the following information, in which order would you choose the following projects based on the profitability index? Project A (NPV of cash flows: $190,000, Investment Cost: $50,000) Project B (NPV of cash flows: $200,000, Investment Cost: $70,000) Project C (NPV of cash flows: $440,000, Investment Cost: $110,000)
Project B, Project C then Project A
Project C, Project B then Project A
Project A, Project C then Project B
Project A, Project B then Project C
Project C, Project A then Project B
Woolridge LP is considering investing in a project that will cost $100,000 and will generate $25,000 in cash flows for the next 5 years. Assuming a Discount Rate of 12%, which of the following is true?
The projects profitability index is 1.2
The projects NPV is $18,143
The projects payback period is 5 years
All of the above are true
The projects IRR is 7.9%
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