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A Company Is Considering Two Projects,Project a and Project

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A company is considering two projects,Project A and Project
B.The following information is available for each project:
Project A Project B
Investment $2,000,000 $500,000
Net present value of cash flows …… $800,000 $300,000
Calculate the profitability index for each project.Based on the profitability index, which project should the company pursue and why?

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Calculation Profitability Inde...

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