Information on Four Investment Proposals Is Given Below $$\begin{array} { | r | r |r |} \hline 4 & \$ 45 , 000 & \$ 9,000\\\hline\end{array}$$

question 185

Multiple Choice

Information on four investment proposals is given below:
$\begin{array}{|l|r|r|}\hline \text { Proposal } & \text { Investment } & \text { Net Present Value } \\\hline 1 & \$ 50,000 & \$ 30,000 \\\hline 2 & \$ 60,000 & \$ 24,000 \\\hline 3 & \$ 30,000 & \$ 15,000 \\\hline\end{array}$
$$\begin{array} { | r | r |r |} \hline 4 & \$ 45 , 000 & \$ 9,000\\\hline\end{array}$$
What are preference rankings of the four proposals according to the profitability index?

• A) 3, 4, 1, 2.
• B) 1, 2, 3, 4.
• C) 1, 3, 2, 4.
• D) 2, 1, 4, 3.

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Definitions:

Written Contract

An agreement between two or more parties that is expressed in written form and is intended to be enforceable by law.

Statute of Frauds

The Statute of Frauds is a legal principle requiring certain types of contracts to be in writing and signed to be enforceable.

Partial-Performance Exception

A legal doctrine allowing enforcement of an oral contract, contrary to the Statute of Frauds, based on partial completion of agreed terms.

Statute of Frauds

A legal principle requiring certain types of contracts to be written and signed to be enforceable.