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Corporate Finance · Quiz 1 · 26 Oct 2025 · September 2025 term

Question 13: ABC Corporation is looking to invest in one new project,…

Question 13

+4 marksOne correct option

ABC Corporation is looking to invest in one new project, and they have three options: Project-A is expected to generate Rs 30 lakh after two years and Rs 40 lakh after 5 years; Project-B is expected to generate Rs 10 lakh each year for 6 years (beginning next year); Project-C is expected to generate Rs 100 lakh after 10 years. Each one of the project costs Rs 40 lakh today. The required rate of return on these projects is 10%. What is the profitability index of Project-B?

  1. A

    1.09

  2. B

    1.19

  3. C

    1.88

  4. D

    0.88

Show answer

Correct answer

  • A

    1.09

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Question 13 of 25 in the IIT Madras BS Corporate Finance (Corporate Finance) Quiz 1 paper sat on 26 Oct 2025, in the September 2025 term (IIT M DEGREE AN EXAM QDB2 26 Oct 2025). It carries 4 marks.

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