The profitability index for project A is closest to ________

Consider the following two projects:

Project
Year 0
Cash Flow Year 1
Cash Flow Year 2
Cash Flow Year 3
Cash Flow Year 4
Cash Flow Discount
Rate
A -100 40 50 60 N/A 0.13
B -73 30 30 30 30 0.13

A) 0.16
B) 32.28
C) 0.24
D) 16.14


Answer: A

Business

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