The Following Information Is Provided by Rojas Company What Is the Profitability Index for Project B? (Round Your

question 52

Multiple Choice

The following information is provided by Rojas Company: $$\begin{array} { | l | r | r | r | r | } \hline & { \text { Project A } } & { \text { Project B } } & \text { Project C } & \text { Project D } \\\hline \text { Initial investment } & \$ 424,000 & \$ 212,000 & \$ 552,000 & \$ 504,000 \\\hline \text { PV of cash inflows } & \$ 588,000 & \$ 396,000 & \$ 800,000 & \$ 402,000 \\\hline \text { Payback period (years) } & 3.6 & 3.2 & 4.0 & 2.0 \\\hline \text { NPV of project } & \$ 164,000 & \$ 184,000 & \$ 248,000 & ( \$ 102,000 ) \\\hline\end{array}$$ What is the profitability index for Project B? (Round your answer to two decimal places.)

• A) 1.92
• B) 1.36
• C) 1.25
• D) 1.87

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