Problem 8-23 Profitability Index (LO3) Consider the following projects: Co C₁ -$2,450 +$ 2,350 -2,450 +1,790 Project A B a. Calculate the profitability index for A and B assuming a 23% opportunity cost of capital. Note: Do not round intermediate calculations. Round your answers to 4 decimal places. Project A B Profitability index Project B b. According to the profitability index rule, which project(s) should you accept? Project A Both C₂ +$ 1,550 +1,798 0.6410 0.5490 O Neither
Problem 8-23 Profitability Index (LO3) Consider the following projects: Co C₁ -$2,450 +$ 2,350 -2,450 +1,790 Project A B a. Calculate the profitability index for A and B assuming a 23% opportunity cost of capital. Note: Do not round intermediate calculations. Round your answers to 4 decimal places. Project A B Profitability index Project B b. According to the profitability index rule, which project(s) should you accept? Project A Both C₂ +$ 1,550 +1,798 0.6410 0.5490 O Neither
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter12: Capital Investment Analysis
Section: Chapter Questions
Problem 3PB: Net present value method, present value index, and analysis for a service company First United Bank...
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