What is shaylees order of preference based on the


Problem

Shaylee Corp has $2.10 million to invest in new projects. The company's managers have presented a number of possible options that the board must prioritize. Information about the projects follows: Project A Project B Project C Project D Initial investment $ 720,000 $ 400,000 $ 960,000 $ 1,115,000 Present value of future cash flows 935,000 500,000 1,650,000 1,310,000.

Required:

1. Is Shaylee able to invest in all of these projects simultaneously?

2-a. Calculate the profitability index for each project.

2-b. What is Shaylee's order of preference based on the profitability index?

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Accounting Basics: What is shaylees order of preference based on the
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