Economics · Capital Budgeting
Given the following investment proposals: Proposal A: Initial Investment = ₹2,50,000; NPV = ₹60,000 Proposal B: Initial Investment = ₹4,00,000; NPV = ₹90,000 Proposal C: Initial Investment = ₹6,00,000; NPV = ₹80,000 Proposal D: Initial Investment = ₹8,00,000; NPV = ₹1,20,000 On the basis of Profitability Index (PI), rank the investment proposals from best to worst (Rank I to IV):
- 1I(D), II(B), III(C), IV(A)
- 2I(A), II(B), III(D), IV(C)✓
- 3I(C), II(D), III(B), IV(A)
- 4I(A), II(B), III(C), IV(D)
Correct answer
I(A), II(B), III(D), IV(C)
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