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

Question

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

Quizplus · Accepted Answer

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

The Following Information Is Provided by Chelsa Building Systems Calculate the Profitability Index for Project B