Calculate the profitability index for project a and project


Tanjong Inc. is considering two mutually exclusive projects, A and B. Project A costs RM95,000 and is expected to generate RM65,000 in year one and RM75,000 in year two. Project B costs RM120,000 and is expected to generate RM64,000 in year one, RM67,000 in year two, RM56,000 in year three, and RM45,000 in year four. Tanjong Inc.'s required rate of return for these projects is 10%. Calculate the profitability index for Project A and Project B. Which project is better?

Request for Solution File

Ask an Expert for Answer!!
Finance Basics: Calculate the profitability index for project a and project
Reference No:- TGS0600317

Expected delivery within 24 Hours