The present values of cash flows for projects, each of which has an initial capital outlay of $350,000, are

Project A

$450,000

Project B

$400,000

Project C

$375,000

The cash value added (or profitability index) for each project suggests that the preferred project is

  1. Project A
  2. Project B
  3. Project C
  4. All projects are the same because the initial capital outlay is the same