6 Homework- Natasha Johnson -Google Chrome cure https://www.mathxd.com/Student/P

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6 Homework- Natasha Johnson -Google Chrome cure https://www.mathxd.com/Student/PlayerHomeworks 20688questionld-14&flushed; Homework: Chapter 8 Homework Score: 0 of 1 pt P 8-36 (similar to) | 13 of 14 (7 complete) Fabulous Fabricators needs to decide how to allocate space in its production facility this year. It is cons.dering the followingc NPV $1.99 million $0.96 million $1.47 million Use of Facility 100% 54% 46% Contract a. What are the profitability indexes of the projects? (Round to two decimal places) The profitability index for contract A is Enter your answer in the answer box and then click Check Answer

Explanation / Answer

Assume the production facility this year is 10 $ million.

PI= 1+(NPV/ initial outlay)

Calculation of PI

A = 1+ (1.99/10)=1.199

B= 1+(0.96/5.4)= 1.1777

C = 1+(1.47/4.6)= 1.319

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