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7 Fabulous Fabricators needs to decide how to allocate space in its production facility...

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Finance

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Fabulous Fabricators needs to decide how to allocate space in its production facility this year. It is considering the following contracts Contract NPV $1.97 ion $0.97 million $1.46 million Use of Facilit 100% 5'5% 47% a. What are the profitability indexes of the projects? b. What should Fabulous Fabricators do? a. What are the profitability indexes of the projects? The profitability index for contract A is. (Round to two decimal places.) The profitability index for contract B is(Round to two decimal places.) The profitability index for contract C is. (Round to two decimal places.) b. What should Fabulous Fabricators do? (Select the best choice below.) OA. Since the NPV of A is the largest, it should choose A. C B. Since it has the capacity to do both B and C and NPVB + NPVC ?s greater than NPVA, it should do both B and C. C. It should take the two projects with the highest profitability indexes: C and A. O D. Since the profitability index for C is the largest, it should choose C

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