Question

Capital rationing. Mick's Pub's is considering expanding the number of restaurants it owns. If it decides on the expansion, it will invest $2,300,000, and the NPV of the project is $900,000. What is the profitability index of the project?

Accepted Answer

A)   0.39
B)   1.00
C)   1.39
D)   2.39E) B) and C)
F) None of the above

Exam 12: Evaluating Project Economics and Capital Rationing

Capital rationing. Mick's Pub's is considering expanding the number of restaurants it owns. If it decides on the expansion, it will invest $2,300,000, and the NPV of the project is $900,000. What is the profitability index of the project?

Correct Answer
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Exam 12: Evaluating Project Economics and Capital Rationing

Capital rationing. Mick's Pub's is considering expanding the number of restaurants it owns. If it decides on the expansion, it will invest $2,300,000, and the NPV of the project is $900,000. What is the profitability index of the project?

Correct AnswerverifiedShow Answer

Correct Answer
verified