The management of Winstead Corporation is considering the following three investment projects (Ignore income taxes.):     Project Q Project R Project S Investment required $ 57,200 $ 97,200 $ 176,000 Present value of cash inflows $ 62,092 $ 111,792 $ 193,320   The only cash outflows are the initial investments in the projects.   Required: Rank the investment projects using the project profitability index.

Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 6EB: The management of Ryland International Is considering Investing in a new facility and the following...
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The management of Winstead Corporation is considering the following three investment projects (Ignore income taxes.):

 

  Project Q Project R Project S
Investment required $ 57,200 $ 97,200 $ 176,000
Present value of cash inflows $ 62,092 $ 111,792 $ 193,320

 

The only cash outflows are the initial investments in the projects.

 

Required:

Rank the investment projects using the project profitability index.

The management of Winstead Corporation is considering the following three investment projects (Ignore income taxes.):
Project Q
$ 57,200
$ 62,092
Project R
$ 97,200
$ 111,792
Project S
$ 176,000
$ 193,320
The only cash outflows are the initial investments in the projects.
Required:
Rank the investment projects using the project profitability index.
Investment required
Present value of cash inflows
Rank 1
Rank 2
Rank 3
Project Q
Project R
Project S
Transcribed Image Text:The management of Winstead Corporation is considering the following three investment projects (Ignore income taxes.): Project Q $ 57,200 $ 62,092 Project R $ 97,200 $ 111,792 Project S $ 176,000 $ 193,320 The only cash outflows are the initial investments in the projects. Required: Rank the investment projects using the project profitability index. Investment required Present value of cash inflows Rank 1 Rank 2 Rank 3 Project Q Project R Project S
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