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

question 24

Multiple Choice

The following information is provided by Glinda Systems: $$\begin{array} { | l | r | r | r | r | } \hline & \text { Project A } & \text { Project B } & \text { Project C } & \text { Project D } \\\hline \text { Initial investment } & \$ 428,000 & \$ 212,000 & \$ 566,000 & \$ 512,000 \\\hline \text { PV of cash inflows } & \$ 590,000 & \$ 380,000 & \$ 814,000 & \$ 398,000 \\\hline \text { Payback period (years) } & 3.6 & 3.2 & 4.0 & 2.0 \\\hline \text { NPV of project } & \$ 162,000 & \$ 168,000 & \$ 248,000 & \$ 114,000 \\\hline\end{array}$$ What is the profitability index for Project B? (Round your answer to two decimal places.)

• A) 1.92
• B) 1.36
• C) 1.25
• D) 1.79

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