1.00 points Shaylee Corp has S2.25 million to invest in new projects. The compan

Question

1.00 points Shaylee Corp has S2.25 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: Initial investment Present value of future cash flows Project A Project 8 ProjectC Project D S 610,000 $ 290,000 $ 850,000 S 1,005,000 825,000 445,000 1,280,000 1,820,000 Required: 1. Is Shaylee able to invest in all of these projects simultaneously? No Yes 2-a. Calculate the profitabillty Index for each project. (Round your answers to 4 decimal places) Project A Project B Project C Project D 2-b. What is Shaylee's order of preference based on the profitability index? Project A Project B Project C Project D

Explanation / Answer

1) No

2a) Profitability index :

Rank :

Profitability index Project A 825000/610000 = 1.3525 Project B 445000/290000 = 1.5345 Project C 1280000/850000 = 1.5059 Project D 1820000/1005000 = 1.8109

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