2. Finance
3. the treasurer of tropical fruits inc has projected the cash...

# Question: the treasurer of tropical fruits inc has projected the cash...

###### Question details

The treasurer of Tropical Fruits, Inc., has projected the cash flows of Projects A, B, and C as follows:

 Year Project A Project B Project C 0 −$215,000 −$ 380,000 −$215,000 1 138,000 232,000 152,000 2 138,000 232,000 118,000 Suppose the relevant discount rate is 9 percent per year. a. Compute the profitability index for each of the three projects. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)  Profitability index Project A Project B Project C b. Compute the NPV for each of the three projects. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)  NPV Project A$ Project B $Project C$

c. Suppose these three projects are independent. Which project(s) should the company accept based on the profitability index rule?

• Project A

• Project B

• Project C

• Project A, Project B, Project C

• Project A, Project B

• Project A, Project C

• Project B, Project C

d. Suppose these three projects are mutually exclusive. Which project(s) should the company accept based on the profitability index rule?

• Project A

• Project B

• Project C

• Project A, Project B, Project C

• Project A, Project B

• Project A, Project C

• Project B, Project C

e. Suppose the budget for these projects is \$595,000. The projects are not divisible. Which project(s) should be accepted?

• Project A

• Project B

• Project C

• Project A, Project B, Project C

• Project B, Project C

• Project B, Project A

• Project A, Project C