Question
Consider the below estimated cash flows for Project A. Assume the cost of capital is 8%. Year Project A 0 ($30,000) 1 $8,000 2 $9,000
Consider the below estimated cash flows for Project A. Assume the cost of capital is 8%.
| Year | Project A |
| 0 | ($30,000) |
| 1 | $8,000 |
| 2 | $9,000 |
| 3 | $7,000 |
| 4 | $10,000 |
10. Find the Profitability Index (PI) of Project As projected cash flows.
| a. | 0.07 |
| b. | 0.93 |
| c. | 1.13 |
| d. | 0.73 |
| e. | -0.93 |
11. Find the Modified Internal Rate of Return (MIRR) for Project As projected cash flows.
| a. | 13.3% |
| b. | 8.0% |
| c. | 6.2% |
| d. | 5.1% |
| e. | 3.5% |
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Managerial Accounting Tools for Business Decision Making
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso, Ibrahim M. Aly
3rd Canadian edition
978-1118033890
