A firm has the following investment opportunities. Required investment outlays and the profitability index for each of these investments are as follows: Project Investment Cost Profitability Index I $300,000 0.5 II 450,000 1.4 III 650,000 1.8 IV 750,000 1.6 The firm's budget ceiling for initial outlays during the present period is P2,500,000. The proposed projects are independent of each other. Which project or projects would you recommend that the firm accept? Group of answer choices Projects I, III, III, and IV Projects II and IV Projects II, III and IV Project I Projects III and IV Project III only Projects II and III
A firm has the following investment opportunities. Required investment outlays and the profitability index for each of these investments are as follows: Project Investment Cost Profitability Index I $300,000 0.5 II 450,000 1.4 III 650,000 1.8 IV 750,000 1.6 The firm's budget ceiling for initial outlays during the present period is P2,500,000. The proposed projects are independent of each other. Which project or projects would you recommend that the firm accept? Group of answer choices Projects I, III, III, and IV Projects II and IV Projects II, III and IV Project I Projects III and IV Project III only Projects II and III
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
Related questions
Question
50.
A firm has the following investment opportunities. Required investment outlays and the profitability index for each of these investments are as follows:
|
Project |
Investment Cost |
Profitability Index |
|
I |
$300,000 |
0.5 |
|
II |
450,000 |
1.4 |
|
III |
650,000 |
1.8 |
|
IV |
750,000 |
1.6 |
The firm's budget ceiling for initial outlays during the present period is P2,500,000. The proposed projects are independent of each other. Which project or projects would you recommend that the firm accept?
Group of answer choices
Projects I, III, III, and IV
Projects II and IV
Projects II, III and IV
Project I
Projects III and IV
Project III only
Projects II and III
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