The Management of Hibert Corporation Is Considering Three Investment Projects-W

question 405

Multiple Choice

The management of Hibert Corporation is considering three investment projects-W, X, and Y. Project W would require an investment of $21,000, Project X of $66,000, and Project Y of $95,000. The present value of the cash inflows would be $22,470 for Project W, $73,920 for Project X, and $98,800 for Project Y. (Ignore income taxes.) Rank the projects according to the profitability index, from most profitable to least profitable.

• A) Y, W, X
• B) X, Y, W
• C) X, W, Y
• D) W, Y, X

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