Is Shaylee able to invest in all of these projects simultaneously? multiple choice No Yes    2-a. Calculate the profitability index for each project. (

Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter12: Capital Investment Analysis
Section: Chapter Questions
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Shaylee Corp has $2.10 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:
 

  Project A Project B Project C Project D
Initial investment $ 720,000 $ 400,000 $ 960,000 $ 1,115,000
Present value of future cash flows   935,000   500,000   1,650,000   1,310,000
 

  
Required:
1.
 Is Shaylee able to invest in all of these projects simultaneously?

multiple choice

  • No
  • Yes

  

2-a. Calculate the profitability index for each project. (Round your answers to 4 decimal places.)

 

 

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