Item A has an NPV of $300 and an original cost of $500. Item B has an
Question:
Item A has an NPV of $300 and an original cost of $500. Item B has an NPV of $350 and an original cost of $700. What is the profitability index (PI) of items A and B, and which is a more attractive investment?
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 80% (10 reviews)
While item B has higher NPV item A has a ...View the full answer
Answered By
Pushpinder Singh
Currently, I am PhD scholar with Indian Statistical problem, working in applied statistics and real life data problems. I have done several projects in Statistics especially Time Series data analysis, Regression Techniques.
I am Master in Statistics from Indian Institute of Technology, Kanpur.
I have been teaching students for various University entrance exams and passing grades in Graduation and Post-Graduation.I have expertise in solving problems in Statistics for more than 2 years now.I am a subject expert in Statistics with Assignmentpedia.com.
4.40+
3+ Reviews
10+ Question Solved
Related Book For
Question Posted:
Students also viewed these Corporate Finance questions
-
Suppose the firm in Problem 23.21 is considering two mutually exclusive investments. Project A has an NPV of $1,200, and project B has an NPV of $1,600. As a result of taking project A, the standard...
-
Suppose the firm in the previous problem is considering two mutually exclusive investments. Project A has an NPV of $800, and Project B has an NPV of $1,300. As a result of taking Project A, the...
-
Suppose the firm in the previous problem is considering two mutually exclusive investments. Project A has an NPV of $1,900, and Project B has an NPV of $2,800. As the result of taking Project A, the...
-
Jilmar Company acquired a delivery truck and made payment of P2,870,000 analyzed as follows: Price of truck - P2,500,000 Charge for extra equipment - P150,000 Value added tax (recoverable) -...
-
Bohlander Airlines is considering two alternatives for the financing of a purchase of a fleet of airplanes. These two alternatives are: 1. Issue 60,000 shares of common stock at $45 per share. (Cash...
-
A hotel has to schedule its receptionists according to hourly loads. Management has identified the number of receptionists needed to meet the hourly requirement, which changes from day to day. Assume...
-
Use stepwise regression to build a model for the NBA Combine data in Table B.23. Perform a residual analysis on the final model. Compare this model to the all possible regressions model from Problem...
-
Identify types of organizations that may need to evaluate strategy more frequently than others. Justify your choices.
-
An online book retailer, has two operating divisionslong dashcorporate sales and consumer saleslong dashand two support divisionslong dashhuman resources and information systems. Each sales division...
-
Create a Windows Forms application. Use the following names for the project and solution, respectively: Salary Project and Salary Solution. Save the application in the VB2017\Chap05 folder. At the...
-
As the owner of a business, you must make an investment decision. The investment will expand your company's production plant at a cost of $1 million. The expansion will generate income of $150,000...
-
Joan has a choice of purchasing a car for $20,000 with 9.7 percent interest cost to borrow and a three-year repayment period for leasing the vehicle. Leasing the auto would cost $300 a month for a...
-
In Exercises determine whether the statement is true or false. If it is false, explain why or give an example that shows it is false. If x= tan 0, then Love dx (1 + x)/2 (4/3 cos 0 de.
-
Consider the following batch-flow process consisting of three process steps performed by three machines: Work is processed in batches at each step. Before a batch is processed at step 1, the machine...
-
Using Exhibit 12-9, determine the mix of benefits that would best fit your needs. After choosing your benefits, form into teams of three to five members and answer the following questions. Exhibit...
-
Think about the future trends in Illustration 1.6. What sorts of things will organizations have to do to respond to them? Can you think of any sectors that will not be influenced in some way by these...
-
(a) Use the Laplace transform to find the current i(t) in a single-loop LR-series circuit when i(0) = 0, L = 1 h, R = 10 , and E(t) is as given in Figure 7.3.21. (b) Use a computer graphing program...
-
Koontz and Weihrich (1990) say that matrix-type organizations occur frequently in construction, aerospace, marketing and management consulting firms in which professionals work together on a project....
-
Ed Hobbs and Carrie Lewis form a partnership on May 1, 201X. Hobbs contributes $39,000. Lewis contributes $30,000 cash and land costing $18,500 with a current fair value of $30,500. A $32,000 note...
-
Open Text Corporation provides a suite of business information software products. Exhibit 10-9 contains Note 10 from the companys 2013 annual report detailing long-term debt. Required: a. Open Text...
-
Over the past several years, Catherine Lee has been able to save regularly. As a result, she has $54,188 in savings and investments today. She wants to establish her own business in five years and...
-
Dan Caldwell was married on January 15, 2014. His wife, Catherine, is a full-time student at the university and earns $625 a month working in the library. How many personal exemptions will Dan and...
-
Debra Ferguson received the following items and amounts of income during 2014. Help her calculate (a) her gross income and (b) that portion (dollar amount) of her income that is tax exempt. Salary...
-
A corporation issues 13 %, 15-year bonds with a par value of $570,000 and semiannual interest payments. On the issue date, the annual market rate for these bonds is 11%, which implies a selling price...
-
A production department reports the following conversion costs. Equivalent units of production for conversion total 436,000 units this period. Calculate the cost per equivalent unit of production for...
-
If you were asked whether a large university such as Tennessee or Michigan with a large seating capacity for their football stadiums should build a new football stadium, how would you respond and...
Study smarter with the SolutionInn App