A project has an initial investment of $100,000 and a project profitability index of 0.15.The discount rate is 12%.The net present value of the project is closest to:

Question

Quizplus · Accepted Answer

Project profitability index = Net present value of the project ÷ Investment required
0.15 = Net present value of the project ÷ $100,000
Net present value of the project = 0.15 × $100,000 = $15,000

A Project Has an Initial Investment of $100,000 and a Project