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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Definitions:

Unacceptable Solutions

Proposed resolutions to problems that are deemed insufficient, inappropriate, or ineffective by stakeholders.

Biased

Refers to an unfair tendency or prejudice towards certain ideas, groups, or individuals which can affect decision-making processes.

Time Commitment Costs

The expenses associated with the amount of time required to complete a task or project, considering how that time could have been spent on other activities.

Union Suppression

Involves actions or strategies employed by employers to prevent or diminish the power of labor unions within their organization.