I. project a has the highest ranking according to the, Ask an Expert

Accounting

Logan Company is considering two projects, A and B. The following information has been gathered on these projects:

Project A Project B
Initial investment
needed........................................$40,000 $60,000
Present value of future cash
flows.............................................60,000 85,000
Useful
life.................................................4 years 4 years

Based on this information, which of the following statements is (are) true?

I. Project A has the highest ranking according to the profitability index criterion.

II. Project B has the highest ranking according to the net present value criterion.

A. Only I
B. Only II
C. Both I and II
D. Neither I and II

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M964083

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