We compute the profitability index of a capital-budgeting proposal by: - 792

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Request Description

We compute the profitability index of a capital-budgeting proposal by: 

A.multiplying the cash inflow by the IRR.

B.dividing the present value of the annual after-tax cash flows by the cost of the project.

C.dividing the present value of the annual after-tax cash flows by the cost of capital.

D.multiplying the IRR by the cost of capital.

Solution Description

We compute the profitability index of a capital-budgeting proposal by: