9. Fabulous Fabricators needs to decide how to allocate space in its production facility this year It is considering the following contracts a. What are the profitability indexes of the projects? b. What should Fabulous Fabricators do? a. What are the profitability indexes of the projects? The profitability index for contract Ais (Round to two decimal places.) The profitability index for contract B is (Round to two decimal places) The profitability index for contract C is (Round to two decimal places.) b. What should Fabulous Fabricators do? (Select the best choice below) O A. Since the profitability index for C is the largest, it should choose C. O B. Since it has the capacity to do both B and C and NPVe + NPVc is greater than NPVA. it should do both B and C. OC. Since the NPV of A is the largest, it should choose A O D. It should take the two projects with the highest profitability indexes: C andA

9. Fabulous Fabricators needs to decide how to allocate space in its production facility this year It is considering the following contracts a. What are the profitability indexes of the projects? b. What should Fabulous Fabricators do? a. What are the profitability indexes of the projects? The profitability index for contract Ais (Round to two decimal places.) The profitability index for contract B is (Round to two decimal places) The profitability index for contract C is (Round to two decimal places.) b. What should Fabulous Fabricators do? (Select the best choice below) O A. Since the profitability index for C is the largest, it should choose C. O B. Since it has the capacity to do both B and C and NPVe + NPVc is greater than NPVA. it should do both B and C. OC. Since the NPV of A is the largest, it should choose A O D. It should take the two projects with the highest profitability indexes: C andA

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Concept explainers

Contract Costing

Contract costing is about tracing particular costs related to a particular contract entered into with the customer. It is one of the forms of job order costing. It is useful in long-term contracts at the most. It is seen that substantial time is required for the completion of the contract which takes different accounting periods. Thus, it is very much helpful for recognizing the costs associated with it and accounting in their specific accounting periods.

Question

OC. Since the NPV of A is the largest, it should chse A
O D. It should take the two projects with the highest profitability indexes: C and A
1: Data Table
(Click on the following icon o in order to copy its contents into a spreadsheet.)
Contract
NPV
Use of Facility
$2.03
A.
100%
million
$1.01
million
$1.48
B
58%
42%
million
Shorteo
Snapfish
Z-Zip
TConstructs
Freema
Video C
Counter-Str.
Global Offe.
Winrar-x64..
P Type here to search

9. Fabulous Fabricators needs to decide how to allocate space in its production facility this year.
It is considering the following contracts:
a. What are the profitability indexes of the projects?
b. What should Fabulouo Fabricators do?
1.
a. What are the profitability indexes of the projects?
The profitability index for contract Ais
(Round to two decimal places.)
The profitability index for contract B is
(Round to two decimal places.)
The profitability index for contract C is
(Round to two decimal places.)
b. What should Fabulous Fabricators do? (Select the best choice below)
O A. Since the profitability index for C is the largest, it should choose C.
O B. Since it has the capacity to do both B and C and NPVe +NPVC is greater than
NPVA. it should do both B and C.
OC. Since the NPV of A is the largest, it should choose A
O D. It should take the two projects with the highest profitability indexes: C and A
1. Data Table
(Click on the following icon o in order to copy its contents into a spreadsheet.)
Snapfish
TeamS
Clie
Tonstructs
Counter-S
Globalffe
nrar64

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