Question
Calculate the profitability index for the given projects. Project Initial Investment Present Value of Cash Flows Discount Rate G $90,000 $120,000 8% H $150,000 $180,000
Calculate the profitability index for the given projects.
Project | Initial Investment | Present Value of Cash Flows | Discount Rate |
G | $90,000 | $120,000 | 8% |
H | $150,000 | $180,000 | 10% |
What is the profitability index for Project G?
What is the profitability index for Project H?
Requirement: Calculate the profitability index for Project G and Project H under different conditions.
What is the profitability index for Project G if the initial investment is increased to $100,000?
What is the profitability index for Project H if the present value of cash flows is reduced to $160,000?
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Survey of Accounting
Authors: Carl S. Warren
8th edition
1305961889, 978-1337517386, 1337517380, 978-1305961883
