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A firm is considering the following independent projects.       Project         Investment    Present value offuture cash flows       NPV        A $130  $176 $46 B $103   $115 $12 C $183   $287 $104 D $161   $199 $38 E $184  $273  $89   What is the Profitability Index of Project B? Question 5Answer a. 0.85 b. 1.12 c. 0.89 d. 1.18

A firm is considering the following independent projects.       Project         Investment    Present value offuture cash flows       NPV        A $130  $176 $46 B $103   $115 $12 C $183   $287 $104 D $161   $199 $38 E $184  $273  $89   What is the Profitability Index of Project B? Question 5Answer a. 0.85 b. 1.12 c. 0.89 d. 1.18

Essentials Of Investments
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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Question

A firm is considering the following independent projects.

 

    Project         Investment    Present value of
future cash flows		       NPV       
A $130  $176 $46
B $103   $115 $12
C $183   $287 $104
D $161   $199 $38
E $184  $273  $89

 

What is the Profitability Index of Project B?

Question 5Answer

a.
0.85
b.
1.12
c.
0.89
d.
1.18
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