(Ignore income taxes in this problem.) The management of Solar Corporation is considering the following three investment projects: Rank the projects according to the profitability index, from most profitable to least profitable.

A) M, N, L
B) L, N, M
C) N, L, M
D) N, M, L

Profitability Index

A financial metric that measures the relative profitability of an investment, calculated as the present value of future cash flows divided by the initial investment cost.

Investment Projects

Initiatives undertaken by companies or individuals to allocate capital in ways expected to yield returns or gains over time, such as purchasing new equipment or expanding operations.

Income Taxes

Taxes imposed by government authorities on the income earned by companies and individuals, a significant component of fiscal policy.