(Ignore income taxes in this problem.) The management of Cerra Corporation is considering three investment projects I, J, and K. Project I would require an investment of $18,000, Project J of $42,000, and Project K of $85,000. The present value of the cash inflows would be $19,260 for Project I, $45,780 for Project J, and $91,800 for Project K.
-The profitability index of investment project J is closest to:
A) 0.08
B) 0.91
C) 0.09
D) 1.09
Correct Answer:
Verified
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