We compute the profitability index of a capital-budgeting proposal by: - 4007

Solution Posted by
UoPExpert

UoPExpert

Rating : (2)F
Solution Detail
Price: $1.30
  • From: ,
  • Posted on: Tue 27 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 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: