please explain 9. Temple, Inc. is considering three different independent invest

Question

please explain

9. Temple, Inc. is considering three different independent investment opportunities. The present value of future cash flows, initial investment, net present value, and profitability index for each of the projects are as follows Project A Project B Project C Present value of future cash flows Initial investment Net present value Profitability index S600,000 $550,000 $500,000 320,000 $280,000 1.88 300,000 $250,000 1.83 230,000 $270,000 2.17 In what order should Temple prioritize investment in the projects? A. A, B, C ?.?, ?, ? C. A, C, B D, C, A, B

Explanation / Answer

Projects should be prioritized on the basis of profitability index from highest to lowest, highest being selected first and lowest being selected last

So, as we can find, project C is having highest profitability index, after that A is having next highest profitability index and lastly project B is having the last profitability index

So, the sequence will be C, A, B

So, as per above discussion, option D is the correct option

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