Solved: Fabulous fabricators needs to decide how to allocate space, Financial Accounting

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Fabulous fabricators needs to decide how to allocate space

Fabulous Fabricators needs to decide how to allocate space in its production facility this year. It is considering the following contracts:

a. What are the profitability indexes of the projects?

b. What should Fabulous Fabricators do?

CONTRACT NPV USE OF FACILITY

A $1.96 million 100%

B $0.98 million 58%

C $1.52 Million 42%

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Financial Accounting: Fabulous fabricators needs to decide how to allocate space

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Financial Accounting: Fabulous fabricators needs to decide how to allocate space

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