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Suppose a company has the following three projects and limits its capital budget to $50000. Projects Present Value of Cash Inflows Initial Investment A $40000
Suppose a company has the following three projects and limits its capital budget to $50000.
Projects | Present Value of Cash Inflows | Initial Investment |
A | $40000 | $25000 |
B | 37500 | 25000 |
C | 70000 | 50000 |
- Calculate the projects net present values (NPVs).
- Calculate the projects profitability indexes (PIs).
- Which project(s) should the company choose? Why?
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