A project costs $12,000 and has a discount rate of 15%.Calculate the profitability index of the project that has cash flows of $2,500 in years 1 and 2,and $4000 in years 3 and 4.

Question

Quizplus · Accepted Answer

PI = 11ea7fdb_fbea_dd15_a768_e1765def4435_TB2902_11 PV(Inflows) = 11ea7fdb_fbea_dd16_a768_47e9640f2a1b_TB2902_11 + 11ea7fdb_fbea_dd17_a768_c95499d3dab7_TB2902_11 + 11ea7fdb_fbea_dd18_a768_9d7b68fc5b41_TB2902_11 + 11ea7fdb_fbeb_0429_a768_075aa1bd2537_TB2902_11 = $8,981.34
PI = 11ea7fdb_fbeb_042a_a768_71359907637e_TB2902_11 = 0.75

A Project Costs $12,000 and Has a Discount Rate of 15%.Calculate