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Question 12 The following information is provided by Cupola Systems: Initial investment PV of cash inflows. 1.03 O 1.67 1.08 Project A Project B $420,000 $218,000 $580,000 1.38 Payback period (years) 3.2 4.0 2.0 NPV of project $160,000 $178,000 $256,000 ($98,000) Calculate the profitability index for Project A. (Round your answer to two decimal places.) Project C 3.6 $564,000 $396,000 $820,000 Project D $500,000 $402,000

Question 12 The following information is provided by Cupola Systems: Initial investment PV of cash inflows. 1.03 O 1.67 1.08 Project A Project B $420,000 $218,000 $580,000 1.38 Payback period (years) 3.2 4.0 2.0 NPV of project $160,000 $178,000 $256,000 ($98,000) Calculate the profitability index for Project A. (Round your answer to two decimal places.) Project C 3.6 $564,000 $396,000 $820,000 Project D $500,000 $402,000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question 12 The following information is provided by Cupola Systems: Project A Project B Project C $420,000 $218,000 $564,000 $580,000 $396,000 $820,000 Initial investment PV of cash inflows. 1.03 Payback period 3.2 (years) 4.0 2.0 NPV of project $160,000 $178,000 $256,000 ($98,000) Calculate the profitability index for Project A. (Round your answer to two decimal places.) 1.67 1.08 1.38 Project D 3.6 $500,000 $402,000
Transcribed Image Text:Question 12 The following information is provided by Cupola Systems: Project A Project B Project C $420,000 $218,000 $564,000 $580,000 $396,000 $820,000 Initial investment PV of cash inflows. 1.03 Payback period 3.2 (years) 4.0 2.0 NPV of project $160,000 $178,000 $256,000 ($98,000) Calculate the profitability index for Project A. (Round your answer to two decimal places.) 1.67 1.08 1.38 Project D 3.6 $500,000 $402,000
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