Choudhury Corporation is considering the following three investment projects (Ignore income taxes.): Project HProject IProject JInvestment required$11,000 $53,000 $89,000 Present value of cash inflows$12,980 $61,480 $96,120 The only cash outflows are the initial investments in the projects.Required:Rank the investment projects using the project profitability index.
What will be an ideal response?
| Project H | Project I | Project J | |||||||
| Investment required (a) | $ | (11,000 | ) | $ | (53,000 | ) | $ | (89,000 | ) |
| Present value of cash inflows | 12,980 | 61,480 | 96,120 | ||||||
| Net present value (b) | $ | 1,980 | $ | 8,480 | $ | 7,120 | |||
| Project profitability index (b) ÷ (a) | 0.18 | 0.16 | 0.08 | ||||||
| Ranked by project profitability index | 1 | 2 | 3 | ? | |||||
You might also like to view...
Which type of sales person is best suited to selling technologically-sophisticated products in developed countries?
A) expatriates B) third-country nationals C) host-country nationals D) agents of any nationality E) none of the above
A retailer is a business that buys products to sell to other businesses that then sell the products to other consumers
Indicate whether the statement is true or false
Which of the following evaluates a project's position?
A. Value Chain Analysis B. SWOT Analysis C. The Five Forces Model D. Three Generic Strategies
Which of the following statements is false?
a. "Offshoring" sends work formerly performed in the home country to other countries. b. Relevant information for outsourcing can be either qualitative or quantitative. c. Offshoring could possibly create a net gain in jobs for United States. d. All of the above statements are true.