Peach Corporation is considering several investment proposals, as shown below: Investment Proposal A B C D...
Peach Corporation is considering several investment proposals, as shown below: Investment Proposal A B C D Investment required $ 132,000 $ 165,000 $ 99,000 $ 123,750 Present value of future net cash flows $ 158,400 $ 247,500 $ 138,600 $ 276,000 If the project profitability index is used, the ranking of the projects from most to least profitable would be:
Homework Answers
Project profitability index = Net present value of future cash inflows / Investment required
A= 158,400/132,000 = 1.2
B= 247,500/165,000 = 1.5
C= 138,600/99,000 = 1.4
D= 276,000/123,750 = 2.2
A, C, B, D
Comment if you face any issues
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