Fabulous Fabricators needs to decide how to allocate space in its production facility this year. It is considering the following contracts: a. What are the profitability indexes of the projects? b. What should Fabulous Fabricators do? a. What are the profitability indexes of the projects? The profitability index for contract A is (Round to two decimal places.) The profitability index for contract B is. (Round to two decimal places.) The profitability index for contract C is. (Round to two decimal places.) b. What should Fabulous Fabricators do? (Select the best choice below.) O A. Since the profitability index for C is the largest, it should choose C. O B. It should take the two projects with the highest profitability indexes: Cand A OC. Since it has the capacity to do both B and C and NPV8 + NPVC is greater than NPVA, it should do both B and C. O D. Since the NPV of A is the largest, it should choose A.

Fabulous Fabricators needs to decide how to allocate space in its production facility this year. It is considering the following contracts: a. What are the profitability indexes of the projects? b. What should Fabulous Fabricators do? a. What are the profitability indexes of the projects? The profitability index for contract A is (Round to two decimal places.) The profitability index for contract B is. (Round to two decimal places.) The profitability index for contract C is. (Round to two decimal places.) b. What should Fabulous Fabricators do? (Select the best choice below.) O A. Since the profitability index for C is the largest, it should choose C. O B. It should take the two projects with the highest profitability indexes: Cand A OC. Since it has the capacity to do both B and C and NPV8 + NPVC is greater than NPVA, it should do both B and C. O D. Since the NPV of A is the largest, it should choose A.

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

Section: Chapter Questions

Problem 1PS

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