A company is considering four mutually exclusive projects A,B,C,and D.Project A requires an initial investment of $100,000 and is expected to generate after-tax cash flows of $62,500 per year for two years.Project B requires an initial investment of $160,000 and is expected to generate after-tax cash flows of $72,000 per year for three years.Project C requires an initial investment of $125,000 and is expected to generate $45,000 per year for four years.Project D requires an initial investment of $200,000 and is expected to generate after-tax cash flows of $87,500 per year for three years.The appropriate discount rate is 10 percent.Rank the projects by their PIs in descending order.

Question

Quizplus · Accepted Answer

Project C's PI 11ea8229_3481_4b84_bbd8_e933a9ced185_TB1726_00 Project B's PI 11ea8229_3481_4b85_bbd8_0dbdcc419c6a_TB1726_00 Project D's PI 11ea8229_3481_4b86_bbd8_3b3e17cb9b7c_TB1726_00 Project A's PI 11ea8229_3481_7297_bbd8_e5cf2ee62a4c_TB1726_00

A Company Is Considering Four Mutually Exclusive Projects A,B,C,and D