Question
Shaylee Corp has $2.00 million to invest in new projects. The companys managers have presented a number of possible options that the board must prioritize.
Shaylee Corp has $2.00 million to invest in new projects. The companys managers have presented a number of possible options that the board must prioritize. Information about the projects follows:
| Project A | Project B | Project C | Project D | |||||
| Initial investment | $ | 423,000 | $ | 238,000 | $ | 728,000 | $ | 953,000 |
| Present value of future cash flows | 773,000 | 423,000 | 1,208,000 | 1,568,000 | ||||
Required:
1. Is Shaylee able to invest in all of these projects simultaneously?
2-A. Calculate the profitability index for each project.
2-B. What is Shaylees order of preference based on the profitability index?
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Auditing Employee Management
Authors: Kelli W. Vito, SPHR, CCP
1st Edition
0894137190, 9780894137198
