Answered step by step
Verified Expert Solution
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?
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
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