The Following Information Is Available for a Potential Investment for Panda

question 58

Multiple Choice

The following information is available for a potential investment for Panda Company: $$\begin{array} { l l } \text { Initial investment } & \$ 40,000 \\\text { Net annual cash inflow } & 10,000 \\\text { Net present value } & 18,112 \\\text { Salvage value } & 5,000 \\\text { Useful life } & 10 \text { yrs. }\end{array}$$ The potential investment's profitability index is

• A)4.00.
• B)2.85.
• C)2.50.
• D)1.45.

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