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A company is considering three projects (G, H, and I) that have the following expected cash flows and risk-adjusted discount rates. Project Discount Rate (
A company is considering three projects (G, H, and I) that have the following expected cash flows and risk-adjusted discount rates.
| Project | Discount Rate (k) | Initial Investment | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
| G | 9.0% | ($800) | $200 | $200 | $200 | $200 | $250 |
| H | 5.0% | ($500) | $300 | $50 | $50 | $50 | $200 |
| I | 7.0% | ($400) | $90 | $120 | $150 | $100 | $50 |
The company wants to rank the projects based on PI. Which project has the highest PI?
- Project G
- Project H
- Project I
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