Consider the following cash flows for two mutually exclusive capital investment projects. The required rate of return is 15%. Use this information for the questions. Year Project A Cash Project B Cash Flow Flow -$40,000 -$30000 12,000 9,000 12,000 9,000 3 12,000 9,000 4 10,800 8,100 10,800 8,100 5,400 8,100 What is the profitability index of project B? O 1.06 1.117 O 1.09 O .94 O 1.03

Consider the following cash flows for two mutually exclusive capital investment projects. The required rate of return is 15%. Use this information for the questions. Year Project A Cash Project B Cash Flow Flow -$40,000 -$30000 12,000 9,000 12,000 9,000 3 12,000 9,000 4 10,800 8,100 10,800 8,100 5,400 8,100 What is the profitability index of project B? O 1.06 1.117 O 1.09 O .94 O 1.03

Financial And Managerial Accounting

15th Edition

ISBN:9781337902663

Author:WARREN, Carl S.

Publisher:WARREN, Carl S.

Chapter26: Capital Investment Analysis

Section: Chapter Questions

Problem 4CMA

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