The Following Details Are Provided by Dopler Company What Is the Profitability Index for Project C?
A) 1

question 50

Multiple Choice

The following details are provided by Dopler Company:
$\begin{array}{|c|c|c|c|c|}\hline & \text { Project A } & \text { Project B } & \text { Project C } & \text { Project D } \\\hline \text { Initial investment } & \$ 426,000 & \$ 204,000 & \$ 570,000 & \$ 518,000 \\\hline \text { PV of cash inflows } & \$ 574,000 & \$ 400,000 & \$ 804,000 & \$ 390,000 \\\hline \text { Payback period (years) } & 3.6 & 3.2 & 4.0 & 2.0 \\\hline \text { NPV of project } & \$ 148,000 & \$ 196,000 & \$ 234,000 & \$ 128,000 \\\hline\end{array}$

What is the profitability index for Project C?

• A) 1.23
• B) 1.25
• C) 1.37
• D) 1.41

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