We compute the profitability index of a capital-budgeting proposal by:
A.
multiplying the cash inflow by the IRR.
B.
dividing the present value of the annual after-tax cash flows by the cost of the project.
C.
dividing the present value of the annual after-tax cash flows by the cost of capital.
D.
multiplying the IRR by the cost of capital.
A.
multiplying the cash inflow by the IRR.
B.
dividing the present value of the annual after-tax cash flows by the cost of the project.
C.
dividing the present value of the annual after-tax cash flows by the cost of capital.
D.
multiplying the IRR by the cost of capital.
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