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16. Suppose a company has proposed a new 5-year project. The project has an initial outlay of $121,000 and has expected cash flows of $34,000
16.
Suppose a company has proposed a new 5-year project. The project has an initial outlay of $121,000 and has expected cash flows of $34,000 in year 1, $49,000 in year 2, $54,000 in year 3, $63,000 in year 4, and $72,000 in year 5. The required rate of return is 12% for projects at this company. What is the profitability index for this project? (Answer to the nearest hundredth, e.g. 1.23)
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