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Based on project profitability index for each investment

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Westerville Golf Company is in the process of evaluating the two investment proposals given below:Investment Proposal

  • Investment required $(500,000) $(450,000)
  • Present value of cash inflows 550,000 500,000
  • Net present value $50,000 $50,000
  • Life of the project 4 years 5 years

Ignore the impact of income taxes in your calculation.
Based on project profitability index for each investment proposal, which investment proposal should be undertaken and what is its project profitability index?

Reference no: EM13601648

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