Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

can you show the excel functions? Problem 8: Calculating Profitability Index. Use the following set of cash flows to calculate the Profitability Index at different

can you show the excel functions?
image text in transcribed
image text in transcribed
Problem 8: Calculating Profitability Index. Use the following set of cash flows to calculate the Profitability Index at different required rates of return: Year 0 1 2 3 Cash flow -6,500 4,000 2,000 1,500 8a. The Plis if the required rate of return is 10%. 8a. Points: 3.33 8b. The Plis _if the required rate of return is 15%. 8b. Points: 3.33 8c. The Plis Lif the required rate of return is 22%. 8c. Points: 10 Problem 9: Problems with Profitability Index. The Moby Computer Corporation is trying to choose between the following mutually exclusive design projects using a required return of 9%: Year Cashflow (1) Cashflow (2) 0 -1,000,000 - 10,000 1 410,000 6,800 2 410,000 6,800 3 410,000 6,800 9a. The PI for Project 1 is 9a. Points: 2 96. The PI for Project 2 is 9b. Points: 2 9c. The NPV for Project 1 is $ 9c. Points: 2 9d. The NPV for Project 2 is $_ 9d. Points: 2 9e. Using the Pl decision rule, I would chose project 9e. Points: 1 9f. Using the NPV decision rule, I would chose project 9f. Points: 1 60 61 Problem 8: 62 Year 63 64 65 66 67 Required Rate of Return 68 69 70 0 1 2 3 Cash flow 6,500 4,000 2,000 1,500 PI 10% 15% 22% 71 0 1 2 3 Cashflow (1) -1,000,000 410,000 410,000 410,000 Cashflow (2) -10,000 6,800 6,800 6,800 72 Problem 9: 73 Year 74 75 76 77 78 79 Required Rate of Return 80 81 B2 choice of Projects 83 Using PI 84 Using NPV 85 NPV1 NPV 2 PI1 PI2 9%

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

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

Step: 2

blur-text-image_2

Step: 3

blur-text-image_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

Financial Intelligence For IT Professionals

Authors: Julie Bonner

1st Edition

103215294X, 9781032152943

More Books

Students also viewed these Finance questions

Question

Define pay ranges. What is the purpose of establishing pay ranges?

Answered: 1 week ago