Question: Is the project with the highest profitability index also the one with the highest NPV? Year.........................Project A......................Project B 0.................................$200.............................$200 1.......................................80.................................100 2.......................................80.................................100 3.......................................80.................................100 4.......................................80.......................................

Is the project with the highest profitability index also the one with the highest NPV?

Year.........................Project A......................Project B

0.................................−$200.............................−$200

1.......................................80.................................100

2.......................................80.................................100

3.......................................80.................................100

4.......................................80.......................................

Step by Step Solution

★★★★★

3.37 Rating (150 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock

All input values are shown in yellow Only these valu... View full answer

blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Document Format (1 attachment)

Excel file Icon

1280-B-C-F-S(1457).xlsx

300 KBs Excel File

Students Have Also Explored These Related Corporate Finance Questions!

Q:

If the opportunity cost of capital is 11 %, what is the profitability index for each project? Is the project with the highest profitability index also the one with the highest NPV? Which criterion...

Q:

Is the project with the shortest payback period also the one with the highest NPV? Which criterion should you use? Year Project A Project B -$200 100 100 100 0 $200 80 80 80 80 4

Q:

The cash value added (or profitability index) for each project suggests that the preferred project is: a) Project A

Q:

Need assistance - Please see word doc 3. value: 1.44 points The following are the cash flows of two projects: Year Project A Project B 0 $ 260 $ 260 1 140 160 2 140 160 3 140 160 4 140 If the...

Q:

Publications 2016 Project Execution: A Research Agenda to Explore the Phenomenon James Walter Marion Embry-Riddle Aeronautical University, m..j@erau.edu Tracey Richardson Embry-Riddle Aeronautical...

Q:

Publications 2016 Project Execution: A Research Agenda to Explore the Phenomenon James Walter Marion Embry-Riddle Aeronautical University, m..j@erau.edu Tracey Richardson Embry-Riddle Aeronautical...

Q:

PAPERS What Project Strategy Really Is: The Fundamental Building Block in Strategic Project ManagementPeerasit Patanakul, Stevens Institute of Technology, Hoboken, NJ, USA Aaron J. Shenhar, Rutgers...

Q:

OPERATIONS MANAGEMENT ASSIGNMENT 6 1 Human resources, project management and operations management are all equally vital to a business's success. Each of these focuses on different areas of the...

Q:

Chapter 2 - Planning Project Communication IN THIS CHAPTER Struggling with Proper Project Communication Planning Preventing Common Communication Problems Creating a Project Communication Plan...

Q:

pLEASE po pa help! Reflection po about dto sa mga Framework for Project Management 4. Framework for Project Management Many different professions contribute to the theory and practice of project...

Q:

The following is an algorithm to add two non-negative integers A and B. A and B are binary numbers. They have been inputted as strings. Given the initial values of A and B write an efficient C++...

Q:

Mark each of the following statements true or false: (a) If then (u, v) = u1v1 + Ïu2v2 defines an inner product on R2. (b) If Then (u, v) = 4u1v1 - 2u1v2 - 2u2v1 + 4u2v2 defines an inner product...

Q:

Imagine your past or present employer is considering a new project that involves significant upfront investment and uncertain future cash flows. How would you apply sensitivity analysis and scenario...

Q:

2. Suppose Russia is deciding to Invade or Not Invade its neighbor Ukraine. The United States has to decide to Be Tough or Make Concessions. They will make their decisions simultaneously. Their...

Q:

You want to buy a new car, but you can make an initial payment of only $2,000 and can afford monthly payments of at most $400. a. If the APR on auto loans is 12% and you finance the purchase over 48...

Q:

You can buy a car that is advertised for $24,000 on the following terms: (a) Pay $24,000 and receive a $2,000 rebate from the manufacturer; (b) Pay $500 a month for 4 years for total payments of...

Q:

You have just borrowed $100,000 to buy a condo. You will repay the loan in equal monthly payments of $804.62 over the next 30 years. a. What monthly interest rate are you paying on the loan? What is...

Q:

A) You are scheduled to receive annual payments of $9,700 for each of the next 22 years. Your discount rate is 9 percent. What is the difference in the present value if you receive these payments at...

Q:

Which of the following statements about bonds is NOT correct? (explain your answer) The total return on a bond during a given year is based only on the coupon interest payments received. For a given...

Q:

According to a leasing firm's reports, the mean number of miles driven annually in its leased cars is 13,480 miles with a standard deviation of 1240 miles. The company recently starting using new...