The following information is pro Pre itial investment $4 V of cash inflows $5

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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5.The following information is provided by Pemberton Systems:
Project A
$434,000
$572,000
3.6
Project B
$200,000
$396,000
Project C Project D
Initial investment
PV of cash inflows
$568,000
$510,000
$808,000
$402,000
4.0
Payback period (years)
NPV of project
3.2
2.0
$138,000
$196,000
$240,000
$108,000
Which project has the highest profitability index?
Transcribed Image Text:5.The following information is provided by Pemberton Systems: Project A $434,000 $572,000 3.6 Project B $200,000 $396,000 Project C Project D Initial investment PV of cash inflows $568,000 $510,000 $808,000 $402,000 4.0 Payback period (years) NPV of project 3.2 2.0 $138,000 $196,000 $240,000 $108,000 Which project has the highest profitability index?
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