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The following details are provided by Dopler Company: Project A Project B Project C Project D Initial investment $420,000 $200,000 $550,000 $500,000 PV of cash

The following details are provided by Dopler Company:

Project A

Project B

Project C

Project D

Initial investment

$420,000

$200,000

$550,000

$500,000

PV of cash inflows

$570,000

$380,000

$800,000

$390,000

Payback period (years)

3.6

3.2

4.0

2.0

NPV of project

$150,000

$180,000

$250,000

($110,000)

What is the profitability index for Project B?
1.98
1.38
1.26
1.90

Please explain your answer so I can understand how the solution was derived. Thank you!

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