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 1 Calculate the projects net present values ( NPVs ) 2 Calculate the projects profitability indexes (PIs) 3 Which project(s) should the company choose Why

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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

1. Calculate the projects net present values (NPVs).

2. Calculate the projects profitability indexes (PIs).

3. Which project(s) should the company choose? Why?

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