Question
Badr & Sons. is evaluating 2 (TWO) mutually exclusive investment projects. INITIAL CAPITAL OUTLAY for both projects are as stated in Year 0. The companys
Badr & Sons. is evaluating 2 (TWO) mutually exclusive investment projects. INITIAL CAPITAL OUTLAY for both projects are as stated in Year 0. The companys REQUIRED RATE OF RETURN IS 10.50% and sets 2.5 YEARS AS ITS MINIMUM (DESIRED) PAYBACK PERIOD.
Information about cash flows from the project for the next four years is tabulated below:
| YEAR | PROJECT ALPHA | PROJECT BETA |
| 0 | SR -185,000 | SR -145,000 |
| 1 | 45,000 | 41,000 |
| 2 | 75,000 | 45,000 |
| 3 | 55,000 | 55,000 |
| 4 | 66,000 | 70,000 |
What is PROFITABILITY INDEX for PROJECT BETA ONLY .?
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Investments
Authors: Zvi Bodie, Alex Kane, Alan J. Marcus
5th Edition
0072339160, 978-0072339161
