The Following Information Is Available for a Potential Investment for Panda

The following information is available for a potential investment for Panda Company: $$\begin{array} { l r } \text { Initial investment } & \$ 95,000 \\\text { Net annual cash inflow } & 20,000 \\\text { Net present value } & 36,224 \\\text { Salvage value } & 10,000 \\\text { Useful life } & 10 \text { yrs. }\end{array}$$ The potential investment's profitability index is

A) 4.75.
B) 3.22.
C) 2.62.
D) 1.38.

Correct Answer:

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