The management of Keno Corporation is considering three investment projects-B, C, and D. Project B would require an investment of $15,000, Project C of $50,000, and Project D of $89,000. The present value of the cash inflows would be $16,350 for Project B, $56,500 for Project C, and $96,120 for Project D. Rank the projects according to the profitability index, from most profitable to least profitable. a. B, D, C b. C, B, D c. D, C, B d. D, B, C

Intermediate Financial Management (MindTap Course List)
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ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
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Chapter12: Capital Budgeting: Decision Criteria
Section: Chapter Questions
Problem 7P: Your division is considering two investment projects, each of which requires an up-front expenditure...
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The management of Keno Corporation is considering three investment
projects-B, C, and D. Project B would require an investment of $15,000,
Project C of $50,000, and Project D of $89,000. The present value of the cash
inflows would be $16,350 for Project B, $56,500 for Project C, and $96,120 for
Project D.
Rank the projects according to the profitability index, from most profitable to
least profitable.
a. B, D, C
b. C, B, D
c. D, C, B
d. D, B, C
Transcribed Image Text:The management of Keno Corporation is considering three investment projects-B, C, and D. Project B would require an investment of $15,000, Project C of $50,000, and Project D of $89,000. The present value of the cash inflows would be $16,350 for Project B, $56,500 for Project C, and $96,120 for Project D. Rank the projects according to the profitability index, from most profitable to least profitable. a. B, D, C b. C, B, D c. D, C, B d. D, B, C
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