Use the Table for the Question(s)below

question 20

Multiple Choice

Use the table for the question(s) below.
Consider the following two projects with cash flows in $:
-The profitability index for project A is closest to:

• A)0.12.
• B)21.65.
• C)0.17.
• D)12.04.

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Definitions:

Merger Plan

A strategic proposal for combining two or more companies into a single entity to achieve business benefits.

Pre-merger Market Values

The valuation of companies before they undergo a merger, factoring in stock prices, assets, and overall financial health.

Assets and Liabilities

Balance sheet components where assets are resources owned by a business, and liabilities are its financial obligations.

Holding Company

A corporation that owns enough voting stock in another company to control its policy and management.