Question
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 | $ | 205,000 | $ | 370,000 | $ | 205,000 | |||
| 1 | 132,000 | 228,000 | 142,000 | ||||||
| 2 | 132,000 | 228,000 | 112,000 | ||||||
| Suppose the relevant discount rate is 7 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.) |
| 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.) |
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Contemporary Auditing
Authors: Michael C. Knapp
9th Edition
1133731244, 9781133731245
