Project Typhoon has a net present value of $10,000 and a profitability index of 1.01.Project Cyclone has a net present value of $10,000 and a profitability index of 1.10.Project Surf'sUp has a net present value of $10,000 and a profitability index of 1.05.If only one project could be undertaken,the organization should select __________.
A)Project Typhoon
B)Project Cyclone
C)Project Surf'sUp
D)Not enough information is provided

Question

Quizplus · Accepted Answer

The profitability index indicates the return per dollar invested, so Project Cyclone has the highest return per dollar invested at 1.10. Therefore, it would be the best choice to undertake if only one project could be chosen.

Project Typhoon Has a Net Present Value of $10,000 and a Profitability