Question
Project Detail Summary Line Item Project W Project X Project Y Project Z Invested capital $400,000 $500,000 $400,000 $550,000 Contribution margin percentage 15% 16% 17%
| Project Detail Summary |
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|
|
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| Line Item | Project W | Project X | Project Y | Project Z |
| Invested capital | $400,000 | $500,000 | $400,000 | $550,000 |
| Contribution margin percentage | 15% | 16% | 17% | 19% |
| EBITDA | $105,000 | $100,000 | $102,000 | $110,000 |
| Net income | $40,000 | $50,000 | $35,000 | $49,500 |
Task 2:
The company is analyzing four investment projects but can undertake only one of them. In analyzing investment alternatives, the company's primary objective is to maximize its return on investment, which the company determines by using the investment's net income. Its secondary objective is to invest in projects with the highest contribution margin percentage. In this context, the company is analyzing four projects (W, X, Y, and Z) but can select only one of them.
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Financial Management For Nonprofit Organizations Policies And Practices
Authors: Jo Ann Hankin, John Zietlow, Alan Seidner, Tim O'Brien
3rd Edition
1119382564, 9781119382560
