Community Hospital is evaluating three investments. Which one has the highest profitability index?

The profitability index is a financial metric used to evaluate the attractiveness of an investment. It is calculated by dividing the present value of future cash flows by the initial investment cost. A higher profitability index indicates a more profitable investment opportunity, as it suggests that the investment will generate more value relative to its cost.

If the answer indicates that all three investments are equally profitable, it suggests that the profitability index for the radiology, cardiology, and pharmacy investments are all the same. This scenario implies that no single investment provides a distinct financial advantage over the others in terms of overall profitability. Hence, each investment leads to a balanced return for the hospital, making it a reasonable conclusion from a financial analysis standpoint.

Choosing one investment over another would depend on factors outside the profitability index, such as the strategic goals of the hospital, resource allocation, and potential impact on patient care rather than just numerical profitability alone. This decision should also consider the hospital's operational capabilities and how each investment aligns with its mission and values.