Consider the following two projects with cash flows in $: Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Discount Project C/F C/F C/F C/F C/F C/F C/F C/F Rate Alpha -79 25 25 30 35 35 10 0 14% Beta -80 25 25 25 15 15 15 15 12% The profitability index for project A is closest to: 0.17. 0.33. O 0.42. O 1.65.

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Consider the following two projects with cash flows in $:
Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Discount
Project
C/F
C/F
C/F
C/F
C/F
C/F
C/F C/F
Rate
Alpha
-79
25
25
30
35
35
10
0
14%
Beta
-80
25
25
25
15
15
15
15
12%
The profitability index for project A is closest to:
0.17.
0.33.
O 0.42.
O 1.65.
Transcribed Image Text:Consider the following two projects with cash flows in $: Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Discount Project C/F C/F C/F C/F C/F C/F C/F C/F Rate Alpha -79 25 25 30 35 35 10 0 14% Beta -80 25 25 25 15 15 15 15 12% The profitability index for project A is closest to: 0.17. 0.33. O 0.42. O 1.65.
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