A project requires an initial investment of $60,000 and has a project profitability index of 0.329.The present value of the future cash inflows from this investment is:

Question

Quizplus · Accepted Answer

Project profitability index = Net present value of the project F1F1F1S1F1F1F10 Investment required
0.329 = Net present value of the project F1F1F1S1F1F1F10 $60,000
Net present value of the project = 0.329 F1F1F1S1F1F1F10 $60,000 = $19,740
Net present value of the project = Present value of the future cash inflows - Investment required
$19,740 = Present value of the future cash inflows - $60,000
Present value of the future cash inflows = $19,740 + $60,000 = $79,740

A Project Requires an Initial Investment of $60,000 and Has