Managerial Accounting for Managers
Managerial Accounting for Managers
5th Edition
ISBN: 9781260480337
Author: Noreen, Eric
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Chapter 7, Problem 7.5E

1.

To determine

Concept Introduction:

The profitability index (PI) is one of the techniques of capital budgeting which helps to identify the financial viability of the project. The profitability index is calculated by dividing the present value of cash inflow by the present value of cash outflows. The profitability index must more than 1 to make it acceptable.

the profitability index for each project.

2.

To determine

Concept Introduction:

The profitability index (PI) is one of the techniques of capital budgeting which helps to identify the financial viability of the project. The profitability index is calculated by dividing the present value of cash inflow by the present value of cash outflows. The profitability index must more than 1 to make it acceptable.

the ranking for each project.

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