The Following Information Is Provided by Westwind Systems Calculate the Profitability Index for Project C

question 124

Essay

The following information is provided by Westwind Systems:
$$\begin{array} { l r r r r } & \text { Project A } & \text { Project B } & \text { ProjectC } & \text { Project D } \\\text { Initial investment } & \$ 438,000 & \$ 218,000 & \$ 560,000 & \$ 516,000 \\\text { PV of cash inflows } & \$ 582,000 & \$ 388,000 & \$ 800,000 & \$ 394,000 \\\text { Payback period (years) } & 3.6 & 3.2 & 4.0 & 2.0 \\\text { NPV of project }& \$ 144,000 & \$ 170,000 & \$ 240,000 & \$ 122,000\end{array}$$ Calculate the profitability index for Project C.Show your calculations and round to two decimal places.

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Definitions:

Tariff Revenue

is the income generated by a government from the imposition of tariffs, which are taxes on imported goods.

Tariff

A tax imposed by a government on goods and services imported from other countries to protect domestic industries or to generate revenue.

United States

A country located in North America known for its diverse culture and significant influence in world politics, economy, and culture.

Purchased

Refers to the action of buying goods or services in exchange for money or its equivalent.