Momentive Corp. is evaluating various capital projects using the net present value method and uses the profitability index to rank projects. The following are the costs and NPV for three projects it is considering. Cost NPV $350,000 $31,000 $415,000 $29,500 $290,000 $32,000 Which project would you rank as #1 based on the profitability index? Project X Y Z O Z X O >

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
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Momentive Corp. is evaluating various capital projects using the net present
value method and uses the profitability index to rank projects. The following
are the costs and NPV for three projects it is considering.
Cost
NPV
$350,000
$31,000
$415,000
$29,500
$290,000
$32,000
Which project would you rank as #1 based on the profitability index?
Project
X
Y
Z
N
X
Y
Transcribed Image Text:Momentive Corp. is evaluating various capital projects using the net present value method and uses the profitability index to rank projects. The following are the costs and NPV for three projects it is considering. Cost NPV $350,000 $31,000 $415,000 $29,500 $290,000 $32,000 Which project would you rank as #1 based on the profitability index? Project X Y Z N X Y
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