The Following Details Are Provided by Dopler Company Which Project Has the Highest Profitability Index?
A) Project a \text

question 35

Multiple Choice

The following details are provided by Dopler Company:
$\begin{array}{|c|c|c|c|c|}\hline & \text { Project A } & \text { Project B } & \text { Project C } & \text { Project D } \\\hline \text { Initial investment } & \$ 426,000 & \$ 210,000 & \$ 568,000 & \$ 510,000 \\\hline \text { PV of cash inflows } & \$ 572,000 & \$ 388,000 & \$ 802,000 & \$ 404,000 \\\hline \text { Payback period (years) } & 3,6 & 3.2 & 4.0 & 2.0 \\\hline \text { NPV of project } & \$ 146,000 & \$ 178,000 & \$ 234,000 & 106,000 \\\hline\end{array}$
Which project has the highest profitability index?

• A) Project A
• B) Project B
• C) Project C
• D) Project D

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Definitions:

Bankruptcy

A legal proceeding involving a person or business that is unable to repay outstanding debts, resulting in the assets being used to pay creditors.

Sole Proprietorship

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Crowdfunding

A process where small sums of money are gathered from many people to support a project or enterprise, usually through internet channels.

Financial Statements

Documents that provide an overview of a company or individual's financial condition, including balance sheets, income statements, and cash flow statements.