A proposed project requiring an initial outlay of $230,000 will provide the following year-end cash flows (remember that the initial outlay and year 3 are negative cash flows)

Year 1 2 3 4 5 6

Cash Flows $140,000 $171,000 $-440,000 $259,000 $321,000 $265,000

A. Using a 6.6% required return, please compute the net present value______________. Is the investment desirable?

B. Using a 6.6% required return, please compute the profitability index for the above investment__________________.

C. Using a 6.6% required return, please compute the modified profitability index for the above investment__________________.