(Ignore income taxes in this problem.) Girman Corporation is considering three i

Question

(Ignore income taxes in this problem.) Girman Corporation is considering three investment projects: K, L, and M. Project K would require an investment of $27,000, Project L of $59,000, and Project M of $88,000. No other cash outflows would be involved. The present value of the cash inflows would be $31,860 for Project K, $66,080 for Project L, and $95,040 for Project M. Rank the projects according to the profitability index, from most profitable to least profitable. A) K, M, L B) K, L, M C) L, M, K D) L, K, M

Explanation / Answer

B) K, L, M

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