Managerial Accounting for Managers
Managerial Accounting for Managers
4th Edition
ISBN: 9781259578540
Author: Eric Noreen, Peter C. Brewer Professor, Ray H Garrison
Publisher: McGraw-Hill Education
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Chapter 8, Problem 8.5E

1.

To determine

Concept Introduction:

The profitability index (PI) is one of the techniques of capital budgeting which helps to identify the financial viability of the project. The profitability index is calculated by dividing the present value of cash inflow by the present value of cash outflows. The profitability index must more than 1 to make it acceptable.

the profitability index for each project.

2.

To determine

Concept Introduction:

The profitability index (PI) is one of the techniques of capital budgeting which helps to identify the financial viability of the project. The profitability index is calculated by dividing the present value of cash inflow by the present value of cash outflows. The profitability index must more than 1 to make it acceptable.

the ranking for each project.

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