ABC Manufacturing is evaluating two capital projects.The company's choice will be based on the profitability index.Project #1 has a present value of cash flows of $200,000 and a net initial investment of $180,000 while Project #2 has a present value of future cash flows of $820,000 and a net initial investment of $800,000.Using the tables, which project will ABC choose? Why?
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ABC should choose Project #1 ...View Answer
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