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Management use profitability index to rank projects

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A health care organization is preparing its capital budget for the coming year. Available funds is $7m. Data for the five potential projects is provided in the Template Spreadsheet under the Rationing tab. The corporate cost of capital is 6.25%. Management adds 3.00% for projects that are considered high risk and deducts 2.00% for projects that are considered low risk. Management use the profitability index to rank projects. Given this information, what projects would you recommend for this year's capital budget?

Reference no: EM133495897

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