Solution-Which project has the highest ranking according to

Which project has the highest ranking according to the net

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Reference no: EM13567206

The Weston Company is analyzing projects A, B, and C as possible investment opportunities. Each of these projects has a useful life of five years. The following information has been obtained:

	Project A	Project B	Project C
Initial investment required	$500,000	$480,000	$630,000
Present value of future cash inflows	$675,000	$520,000	$690,000
Internal rate of return	18%	14%	16%

1. Which of the following statements is correct?

A) Project B is preferred over Project C according to the project profitability index.

B) Project B is preferred over Project A according to the internal rate of return.

C) Project C is preferred over Project A according to the project profitability index.

D) Project A is preferred over Project C according to a net present value ranking.

2. Which project has the highest ranking according to the net present value and the project profitability index criteria?

	Net Present Value	Profitability Index
A)	Project B	Project B
B)	Project A	Project A
C)	Project B	Project A
D)	Project C	Project C

Reference no: EM13567206

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Which project has the highest ranking according to the net

Reference no: EM13567206

Reference no: EM13567206

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