Eddie Corporation is considering the following three investment projects (Ignore income taxes.):Project C$ 12,900Project D$ 60,000Project E$ 105,000$ 16,080$ 90,600$ 124,910Investment requiredPresent value of cash inflowsThe profitability index of investment project D is closest to:Multiple ChoiceO0.340.510.491.51

Profitability Index = Present Value of Future Cash Flows / Initial Investment.

Eddie Corporation is considering the following three investment projects (Ignore income taxes.): Project C Project D Project E $ 105,000 $ 12,900 $ 60,000 $ 16,080 $ 90,600 $ 124,910 Investment required Present value of cash inflows The profitability index of investment project D is closest to:

Eddie Corporation is considering the following three investment projects (Ignore income taxes.): Project C Project D Project E $ 105,000 $ 12,900 $ 60,000 $ 16,080 $ 90,600 $ 124,910 Investment required Present value of cash inflows The profitability index of investment project D is closest to:

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

100%

Eddie Corporation is considering the following three investment projects (Ignore income taxes.):
Project C
$ 12,900
Project D
$ 60,000
Project E
$ 105,000
$ 16,080
$ 90,600
$ 124,910
Investment required
Present value of cash inflows
The profitability index of investment project D is closest to:
Multiple Choice
O
0.34
0.51
0.49
1.51

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