Bogart Company is considering the following three investment opportunities:
Opportunity 1: Has an initial cost of $200,000 and the present value of its net cash inflows is $240,000.
Opportunity 2: Has an initial cost of $250,000 and the present value of its net cash inflows is $275,000.
Opportunity 3: Has an initial cost of $300,000 and the present value of its net cash inflows is $345,000.
Using the net present value method, rank the investment opportunities from most profitable to least profitable.

Question

Quizplus · Accepted Answer

Opportunity 3 has the highest net present value ($45,000), followed by Opportunity 1 ($40,000), and then Opportunity 2 ($25,000).

Bogart Company Is Considering the Following Three Investment Opportunities