Projects according to the profitability index

Assignment Help Accounting Basics

Reference no: EM13147074

Tanna Corporation is considering three investment projects: O, P, and Q. Project O would require an investment of $38,000, Project P of $49,000, and Project Q of $91,000. No other cash outflows would be involved. The present value of the cash inflows would be $42,180 for Project O, $53,900 for Project P, and $91,910 for Project Q. Rank the projects according to the profitability index, from most profitable to least profitable.

A) P,O,Q

B) O,Q,P

C) Q,O,P

D) O,P,Q

Reference no: EM13147074

Questions Cloud

Reduction in tax rates increase governments tax receipts : Use a Keynesian 45-degree diagram to show the effect of an increase in government spending and how could a reduction in tax rates increase government's tax receipts?

Determining firm expected rate of return : Dothan Inc.'s stock has a 25% chance of producing a 17% return, a 50% chance of producing a 12% return, and a 25% chance of producing a -18% return. What is the firm's expected rate of return?

Thermodynamic factor is the most important in accounting : Which thermodynamic factor is the most significant in accounting for the fact that phophoric acid is a weak acid? why? Please make sure it is answered completely and explained so I can learn how to do it.

Calculate the percent yield of al2(so4) : Calculate the % yield of Al2(SO4) from the reaction: 2Al(OH)3(s) + 3H2SO4(aq) -> Al2(SO4)3(s) + 6H2O(l) given that 205 g of Al(OH)3 react with 751 g of H2SO4 to yield 252 g Al2(SO4)3.

Projects according to the profitability index : The present value of the cash inflows would be $42,180 for Project O, $53,900 for Project P, and $91,910 for Project Q. Rank the projects according to the profitability index, from most profitable to least profitable.

Calculate the number of moles of h2o produced : Calculate the number of moles of H2O that will be produced by the reaction of .530 moles of solid Al(OH)3 with excess aqueous HClO3

Perfect competition gives an optimal allocation of resource : Discuss, using examples and academic references, the statement that perfect competition gives an optimal allocation of resources but that the existence of scale economies may make perfect competition impossible.

Preferred and common stock holders during of four years : Determine the dividends per share and total cash dividends paid to the preferred and common stock holders during each of the four years

Concept of net present value of the proposed project : By reducing labor and other operating costs, the machine would provide annual cost savings of $59,000. The company requires a minimum pretax return of 12% on all investment projects. The net present value of the proposed project is closest to:

User Account

All Pages