Shaylee Corp has $2.25 million to invest in new projects. The company's managers have presented a number of possible options that the board must prioritize. Information about the projects follows: Project C 600,000 $ 280,000 $ 840,000 $ 995,000 1,250,000 Project B Project D Project A Initial investment 440,000 Present value of future cash flows 815,000 1,610,000 Required: 1. Is Shaylee able to invest in all of these projects simultaneously? No Yes 2-a. Calculate the profitability index for each project. (Round your answers to 4 decimal places.) Profitability Index Project A Project B Project C Project D 2-b. What is Shaylee's order of preference based on the profitability index? Rank Project A Project B Project C Project D

Shaylee Corp has $2.25 million to invest in new projects. The company's managers have presented a number of possible options that the board must prioritize. Information about the projects follows: Project C 600,000 $ 280,000 $ 840,000 $ 995,000 1,250,000 Project B Project D Project A Initial investment 440,000 Present value of future cash flows 815,000 1,610,000 Required: 1. Is Shaylee able to invest in all of these projects simultaneously? No Yes 2-a. Calculate the profitability index for each project. (Round your answers to 4 decimal places.) Profitability Index Project A Project B Project C Project D 2-b. What is Shaylee's order of preference based on the profitability index? Rank Project A Project B Project C Project D

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter11: Capital Budgeting And Risk

Section: Chapter Questions

Problem 11P

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