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The treasurer of Amaro Canned Fruits, Inc., has projected the cash flows of Projects A, B, and C as follows: Year Project A Project B
The treasurer of Amaro Canned Fruits, Inc., has projected the cash flows of Projects A, B, and C as follows: Year Project A Project B Project C 0 5170,000 $320,000 $320,000 5 170,000 114,000 208,000 124,000 2 114,000 208,000 94,000 1 Suppose the relevant discount rate is 12 percent per year. a. Compute the profitability index for each of the three projects. (Do not round intermediate calculations. Round your answers to 2 decimal places, e.g., 32.16.) Project A Project B Project C b. Compute the NPV for each of the three projects. (Do not round intermediate calculations. Round your answers to 2 decimal places, e.g., 32.16.) Project A Project B Project C c. Suppose these three projects are independent. Which project(s) should Amaro accept based on the profitability index rule? Project A Project B Project C Project A, Project B, Project C Project A, Project B Project A, Project C Project B, Project C d. Suppose these three projects are mutually exclusive. Which project(s) should Amaro accept based on the profitability index rule? Project A Project B Project C Project A, Project B, Project C Project A, Project B Project A, Project C Project B, Project C e. Suppose Amaro's budget for these projects is $490,000. The projects are not divisible. Which project(s) should Amaro accept? Project A Project B Project C Project A, Project B, Project C Project B, Project C Project B, Project A Project A, Project C
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