Question: Consider the four capital budgeting projects listed below. Project A Project B Project C Project D Profitability Index 0.47 0.89 1.25 2.32 The appropriate cost
Consider the four capital budgeting projects listed below.
|
| Project A | Project B | Project C | Project D |
| Profitability Index | 0.47 | 0.89 | 1.25 | 2.32 |
The appropriate cost of capital is 8.5%. If these projects are mutually independent and the company is not practicing capital rationing, which one or ones of these four projects shall be accepted?
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