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Compute the PI statistic for Project X and note whether the firm should accept or reject the project with the cash flows shown as follows
Compute the PI statistic for Project X and note whether the firm should accept or reject the project with the cash flows shown as follows if the appropriate cost of capital is 10 percent.
Time: | 0 | 1 | 2 | 3 | 4 | 5 |
Cash Flow: | -250 | 75 | 0 | 100 | 75 | 50 |
A. | -0.0977 percent, reject |
B. | -9.77 percent, reject |
C. | -24.41 percent, reject |
D. | 24.41 percent, accept |
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