The Following Information Is Provided by Horowitz Systems What Is the Profitability Index for Project C? (Round Your

question 138

Multiple Choice

The following information is provided by Horowitz Systems: $$\begin{array} { | l | r | r | r | r | } \hline & \text { Project A } & \text { Project B } & \text { Project C } & \text { Project D } \\\hline \text { Initial investment } & \$ 422,000 & \$ 206,000 & \$ 550,000 & \$ 500,000 \\\hline \text { PV of cash inflows } & \$ 580,000 & \$ 392,000 & \$ 814,000 & \$ 408,000 \\\hline \text { Payback period (years) } & 3.6 & 3.2 & 4.0 & 2.0 \\\hline \text { NPV of project } & \$ 158,000 & \$ 186,000 & \$ 264,000 & \$ 92,000 \\\hline\end{array}$$ What is the profitability index for Project C? (Round your answer to two decimal places. )

• A)1.48
• B)1.38
• C)1.26
• D)1.23

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