A project requires an initial investment of $63,000 and has a project profitability index of 0.332. The present value of the future cash inflows from this investment is:

Multiple Choice

• $83,916

• $20,916

• $42,084

• $63,000

9. Crowl Corporation is investigating automating a process by purchasing a machine for $800,100 that would have a 9 year useful life and no salvage value. By automating the process, the company would save $136,500 per year in cash operating costs. The new machine would replace some old equipment that would be sold for scrap now, yielding $21,900. The annual depreciation on the new machine would be $88,900. The simple rate of return on the investment is closest to (Ignore income taxes.):

Multiple Choice

• 16.79%

• 5.19%

• 11.19%

• 6.12%

10. Trovato Corporation is considering a project that would require an investment of $71,000. No other cash outflows would be involved. The present value of the cash inflows would be $95,140. The profitability index of the project is closest to (Ignore income taxes.):

Multiple Choice

• 0.25

• 0.34

• 1.34

• 0.66