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Perkins Corporation is considering several investment proposals, as shown below: Investment ProposalABCDInvestment required$ 100,000$ 125,000$ 75,000$ 93,750Present value of future net cash flows$ 120,000$ 187,500$

Perkins Corporation is considering several investment proposals, as shown below:

Investment ProposalABCDInvestment required$ 100,000$ 125,000$ 75,000$ 93,750Present value of future net cash flows$ 120,000$ 187,500$ 105,000$ 180,000

If the profitability index is used, the ranking of the projects from most to least profitable would be:

  • B, D, A, C
  • D, B, C, A
  • A, C, B, D
  • B, D, C, A

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