Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Sep 20, 2024

A ten year project produces $68,725 cash flows at the end of each of the following ten years, and today costs $400,321. Assume the discount

A ten year project produces $68,725 cash flows at the end of each of the following ten years, and today costs $400,321. Assume the discount rate is 12%. Should this project be accepted based on the profitability index rule? Why or why not?

No; because the PI is 0.97
No; because the PI is 1.05
Yes; because the PI is 0.97
Yes; because the PI is 1.05

Step by Step Solution

There are 3 Steps involved in it

Step: 1

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

Step: 3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Finance Theory And Practice

Authors: Anne Marie Ward

4th Edition

191235036X, 978-1912350360

More Books

Students also viewed these Finance questions

Question

★★★★★

Leslie Bessler must travel from her hometown to Denver to see her friend Austin. Given the road map of Figure, what route will minimize the distance that Leslie travels? 3 3 2 2 2 3 6 5 2

Answered: 1 week ago

Question

★★★★★

The federal specific tax on gasoline is 18.4¢ per gallon, and the average state specific tax is 20.2¢, ranging from 7.5¢ in Georgia to 25¢ in Connecticut. A statistical study...

Answered: 1 week ago

Question

★★★★★

Present several fundamental working strategies for addressing conflict in the work setting.

Answered: 1 week ago

Question

★★★★★

Farmer McDonald gives banjo lessons for $20 an hour. One day, he spends 10 hours planting $100 worth of seeds on his farm. What opportunity cost has he incurred? What cost would his accountant...

Answered: 1 week ago

Question

★★★★★

Problem 8 . What are the market-based variables that Baker and Wurgler (2006) use to extract the market sentiment index? How are these variables related to the market sentiment index? Given the...

Answered: 1 week ago

Question

★★★★★

Thiessen Orchards acquired canning equipment at a cost of $172,000 on January 1, 2021. The company estimates that it will use the machine for 8 years or 16,000 machine-hours. It estimates that the...

Answered: 1 week ago

Question

★★★★★

Refer to the Journal of Engineering for Gas Turbines and Power (Jan. 2005) study of a high-pressure inlet fogging method for a gas turbine engine, Exercise 11.25. Consider, again, the first-order...

Answered: 1 week ago

Question

★★★★★

You are the manager of a fast-food store. Part of your job is to report to the boss at the end of each day which special is selling best. Use your vast knowledge of descriptive statistics to write...

Answered: 1 week ago

Question

★★★★★

A two-mass system consists of a piston of mass $m_{1}$, connected by two elastic springs, that moves inside a tube as shown in Fig. 5.23. A pendulum of length $l$ and end mass $m_{2}$ is...

Answered: 1 week ago

Question

★★★★★

On 5 January, the day of her successful grand opening of Hair Affair Pty Ltd, Kate Brown collected $$2280$ in cash for hair styling services, and paid $$400$ in wages and $$92$ for rent. Kate...

Answered: 1 week ago

Question

★★★★★

For the four unrelated situations, A-D, calculate the unknown amounts indicated by the letters appearing in each column: A B Beginning Assets... Liabilities. $28,000 $12,000 $28,000 $ (d) 18,600...

Answered: 1 week ago

Question

★★★★★

3. Workplace comedies and dramas typically play off situations that really arise in organizational settings. Watch a few episodes of such workplace sitcoms as Parks and Recreation and Workaholics or...

Answered: 1 week ago

Question

★★★★★

4. Select a city, state, or campus problem that is relevant to the members of your class. Form a group to solve the problem using the six-step decision-making process described in this chapter.

Answered: 1 week ago

Question

★★★★★

2. Arrange an interview with the chair, president, or director of an organization to determine how the various groups within the organization operate. How closely do these groups conform to the...

Answered: 1 week ago

Previous Question Next Question