Question
A project will cost $56,000 today and is forecasted to earn an inflow of $6,000 during the first year, followed by 8 annual
A project will cost $56,000 today and is forecasted to earn an inflow of $6,000 during the first year, followed by 8 annual cash flows of $12,000 thereafter. Cost of capital is 9.8%. What is this project's Profitability Index?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
To calculate the Profitability Index PI of a project we can use the formula Profitability Index Pres...
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Management and Cost Accounting
Authors: Colin Drury
8th edition
978-1408041802, 1408041804, 978-1408048566, 1408048566, 978-1408093887
