Net present value method is the method which is used to compare the initial
Profitability index:
Profitability index is a technique, which is used to rank the proposals of the business. It is used by the management when the business has more investment proposals and limited fund.
The Profitability index is computed as follows:
To determine: The net present value and profitability index for the given proposals.
Want to see the full answer?
Check out a sample textbook solutionChapter 12 Solutions
Managerial Accounting: Tools For Business Decision Making, Seventh Edition Wileyplus Card
- AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
- Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSONIntermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill EducationFinancial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education