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# The treasurer of Amaro Canned Fruits Inc has projected the cash flows of projects A B and C as follows Year Project A Project B Project

 The treasurer of Amaro Canned Fruits, Inc., has projected the cash flows of projects A, B, and C as follows:

 Year Project A Project B Project C 0 ?\$ 195,000 ?\$ 325,000 ?\$ 195,000 1 145,000 238,000 155,000 2 145,000 238,000 125,000

 Suppose the relevant discount rate is 12 percent a year.

 a. Compute the profitability index for each of the three projects. (Do not round intermediate calculations. Round your answers to 2 decimal places. (e.g., 32.16))

 Profitabilityindex Project A Project B Project C

 b. Compute the NPV for each of the three projects. (Do not round intermediate calculations. Round your answers to 2 decimal places. (e.g., 32.16))

 NPV Project A \$ Project B \$ Project C \$

c.

Suppose these three projects are independent. Which project(s) should Amaro accept based on the profitability index rule?

 Project A Project B Project C Project A, Project B, Project C Project A, Project B Project A, Project C Project B, Project C

d.

Suppose these three projects are mutually exclusive. Which project(s) should Amaro accept based on the profitability index rule?

 Project A Project B Project C Project A, Project B, Project C Project A, Project B Project A, Project C Project B, Project C

e.

Suppose AmaroAc€?cs budget for these projects is \$520,000. The projects are not divisible. Which project(s) should Amaro accept?

 Project A Project B Project C Project A, Project B, Project C Project B, Project C Project B, Project A Project A, Project C

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May 06 2020 View more View Less