E$11-8($Algo$)$ Comparing Projects Using Profitability Index $[$LO $11-6]$

Shaylee Corporation has $$2\mathrm{.}00$ million to invest in new projects. The company$$s managers have presented a number of possible options that the board must prioritize. Information about the projects follows:

$$Project AProject BProject CProject DInitial investment$ $418,000$$ $233,000$$ $723,000$$ $948,000$Present value of future cash flows$768,000418,0001,203,0001,563,000$

Required:

$1.$ Is Shaylee able to invest in all of these projects simultaneously?

$2-$a$.$ Calculate the profitability index for each project.

$2-$b$.$ What is Shaylee$$s order of preference based on the profitability index?