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

Question

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

The Following Information Is Provided by Westwind Systems Calculate the Profitability Index for Project A