The following information is provided by Bethel Company:
$$\begin{array} { l l l l l }
& \text { Project A } & \text { Project B } & \text { Project C } & \text { Project D } \
\text { Initial investment } & \$ 438,000 & \$ 218,000 & \$ 560,000 & \$ 516,000 \
\text { PV of cash inflows } & \$ 582,000 & \$ 388,000 & \$ 800,000 & \$ 394,000 \
\text { Payback period (years) } & 3.6 & 3.2 & 4.0 & 2.0 \
\text { NPV of project } & \$ 144,000 & \$ 170,000 & \$ 240,000 & ( \$ 122,000 )
\end{array}$$ Calculate the profitability index for Project A. Show your calculations and round to two decimal places.

Question

The following information is provided by Bethel Company:
 $$\begin{array} { l l l l l } 
& \text { Project A } & \text { Project B } & \text { Project C } & \text { Project D } \
\text { Initial investment } & \$ 438,000 & \$ 218,000 & \$ 560,000 & \$ 516,000 \
\text { PV of cash inflows } & \$ 582,000 & \$ 388,000 & \$ 800,000 & \$ 394,000 \
\text { Payback period (years) } & 3.6 & 3.2 & 4.0 & 2.0 \
\text { NPV of project } & \$ 144,000 & \$ 170,000 & \$ 240,000 & ( \$ 122,000 )
\end{array}$$ Calculate the profitability index for Project A. Show your calculations and round to two decimal places.

Quizplus · Accepted Answer

The Answer of The following information is provided by Bethel Company:
 $$\begin{array} { l l l l l } 
& \text { Project A } & \text { Project B } & \text { Project C } & \text { Project D } \
\text { Initial investment } & \$ 438,000 & \$ 218,000 & \$ 560,000 & \$ 516,000 \
\text { PV of cash inflows } & \$ 582,000 & \$ 388,000 & \$ 800,000 & \$ 394,000 \
\text { Payback period (years) } & 3.6 & 3.2 & 4.0 & 2.0 \
\text { NPV of project } & \$ 144,000 & \$ 170,000 & \$ 240,000 & ( \$ 122,000 )
\end{array}$$ Calculate the profitability index for Project A. Show your calculations and round to two decimal places.

The Following Information Is Provided by Bethel Company Calculate the Profitability Index for Project A