The Following Information Is Available for a Potential Investment for Panda

question 61

Multiple Choice

The following information is available for a potential investment for Panda Company: $\begin{array}{lr}\text { Initial investment } & \$ 95,000 \\\text { Net annual cash inflow } & 20,000 \\\text { Net present value } & 36,224 \\\text { Salvage value } & 10,000 \\\text { Useful life } & 10 \text { yrs. }\end{array}$ The potential investment's profitability index is

• A) 4.75.
• B) 3.22.
• C) 2.62.
• D) 1.38.

---

Definitions:

Anticompetitive Business Practices

Business actions that prevent or reduce competition in a market, often seen as unfair or unethical.

Financial Strength

An indicator of the stability and health of a company's financial condition, often assessed through metrics such as equity, debt levels, and liquidity ratios.

Financial Disclosures

Information provided by a company that illustrates its financial performance and position, often found in annual reports and required by regulatory bodies.

Proxy Contest

A challenge to the management of a corporation, typically initiated by a shareholder group to win control of the board of directors.