We compute the profitability index of a capital-budgeting proposal by: - 1254

Solution Posted by
Solution Detail
Price: $1.25
  • From: ,
  • Posted on: Sun 11 Mar, 2012
  • Request id: None
  • Purchased: 0 time(s)
  • Average Rating: No rating
Request Description

 

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

A.multiplying the IRR by the cost of capital.

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

C.multiplying the cash inflow by the IRR.

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

 

 

Solution Description

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