Question
A firm is considering an investment project with the following cash flows: Year 0 = -$110,000 (initial costs) Year 1 = $50,000 Year 2 =
A firm is considering an investment project with the following cash flows:
Year 0 = -$110,000 (initial costs)
Year 1 = $50,000
Year 2 = $80,000
Year 3 = $30,000
The company has an 11% cost of capital. What is the project's profitability index (PI)?
(A)
1.20
(B)
1.33
(C) This isn't correct answer
1.12
(D)
1.58
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ISE Analysis For Financial Management
Authors: Robert C. Higgins Professor, Jennifer Koski
13th International Edition
1265042632, 9781265042639
