Fabulous Fabricators needs to decide how to allocate space in its production facility this year. It is considering the following contracts: . What are the profitability indexes of the projects? . What should Fabulous Fabricators do? . What are the profitability indexes of the projects? The profitability index for contract A is (Round to two decimal places.) Data table (Click on the following iconin order to copy its contents into a spreadsheet.) NPV Use of Facility $1.99 million 100% $0.96 million 50% $1.52 million 50% Contract ACCOR B C I X

Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter18: Pricing And Profitability Analysis
Section: Chapter Questions
Problem 13E
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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 A is
(Round to two decimal places.)
Data table
(Click on the following icon in order to copy its contents into a spreadsheet.)
NPV
Use of Facility
Contract
A
$1.99 million
100%
$0.96 million
50%
$1.52 million
50%
B
с
Print
ACCES
Done
- X
Transcribed Image Text: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 A is (Round to two decimal places.) Data table (Click on the following icon in order to copy its contents into a spreadsheet.) NPV Use of Facility Contract A $1.99 million 100% $0.96 million 50% $1.52 million 50% B с Print ACCES Done - X
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