Question
Project C 0 C 1 C 2 A $ 2,950 + $ 2,850 + $ 2,050 B 2,950 + 2,290 + 1,898 a. Calculate the
| Project | C0 | C1 | C2 | |||||||||||
| A | $ | 2,950 | + | $ | 2,850 | + | $ | 2,050 | ||||||
| B | 2,950 | + | 2,290 | + | 1,898 | |||||||||
a. Calculate the profitability index for A and B assuming a 23% opportunity cost of capital. (Do not round intermediate calculations. Round your answers to 4 decimal places.)
b. According to the profitability index rule, which project(s) should you accept?
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Project A
-
Project B
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Both
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Neither
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Cases In Financial Management
Authors: I.M. Pandey
3rd Edition
0071333428, 978-0071333429
