Juan is considering two independent projects. Project A costs $74,600 and has projected cash flows of $18,700, $46,300, and $12,200 for Years 1 to 3, respectively. Project B costs $70,000 and has cash flows of $10,600, $15,800, and $67,900 for Years 1 to 3, respectively. Juan assigns a discount rate of 10 percent to Project A and 12 percent to Project B. Which project or projects, if either, should he accept based on the profitability index rule?
A) Accept both projects.
B) Accept Project A and reject Project B.
C) Accept either A or B, but not both.
D) Reject both projects.
E) Accept Project B and reject Project A.
E) Accept Project B and reject Project A.
You might also like to view...
A manufacturer or seller of a product may identify its merchandise and bar other manufacturers from using the same identification by obtaining
a. a patent. b. a copyright. c. a trademark. d. letterhead stationery.
Which of the following does not qualify as a general reason that good people sometimes behave unethically?
a. causing, but not intending, unethical outcome b. choosing not to justify an unethical behavior c. failing to prevent an unethical behavior out of fear of retaliation d. choosing one set of values over a competing set of values
If you have only a few citations and want to omit the alphabetical list, you may choose to use the _______________ format
a. hidden citation b. footnote c. endnote d. Turabian
Companies having inventory decreases due to lower of cost or market valuations will disclose the information to stockholders
Indicate whether the statement is true or false