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Alex73 [517]
3 years ago
6

The following information is provided by Doppler SystemsProject A Project B Project C Project DInitial investment $426,000 $214,

000 $558,000 $516,000PV of cash inflows $584,000 $382,000 $806,000 $390,000Payback period (years) 3.6 3.2 4.0 2.0NPV of project $158,000 $168,000 $248,000 $126,000Calculate the profitability index for Project A. (Round your answer to two decimal places.)
Business
1 answer:
larisa86 [58]3 years ago
4 0

Answer:

The profitability index for Project A is 1.37

Explanation:

Since in the question, the NPV amount is given for all projects through which we can compute the profitability index. The formula to calculate the profitability index is computed by two methods which are shown below:

Profitability index for Project A equals to

Method 1

= Initial investment of Project A + NPV of project A ÷  Initial investment of Project A

= $426,000 + $158,000 ÷ $426000

= $584,000 ÷ $426,000

= 1.37

Method 2

= Present values of project A ÷  Initial investment of Project A

= $584,000 ÷ $426,000

= 1.37

The payback period is irrelevant. Thus, it is ignored.

Hence, the profitability index for Project A is 1.37

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Answer:

correct option is A. $5,087

Explanation:

given data

March 1, 2016, inventory: 1,000 gallons @ $7.20 = $7,200

Purchases                                        amount                 Sales  

Mar. 10               600 gals @ $7.25      4350          Mar. 5 400 gals

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Mar. 23              600 gals @ $7.35        4410          Mar. 20 500 gals

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total                         3000 @7.267          21800

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so

balance is =  3000 - 2300 = 700 @ 7.267

ending inventory is $5087

so correct option is A. $5,087

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Total= $4.33

Explanation:

Giving the following information:

Breakmorning Corporation produces a product that requires 2.6 pounds of materials per unit. The allowance for waste is 0.3 pounds; the allowance for spoilage is 0.1 pounds. The purchase price is $4 per pound, but a 2% discount is always taken. Freight costs are $0.15 per pound and receiving and handling costs are $0.10 per pound.

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