Consider the information from the previous question: Suppose that a project has an upfront cost of $150,000
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Consider the information from the previous question: Suppose that a project has an upfront cost of $150,000 and lasts 4 years, with no residual value. The relevant cash flows from the project are estimated to be:
End of Year 1: $53,000
End of Year 2: $48,000
End of Year 3: $45,000
End of Year 4: $37,000
Suppose that the net present value of this project is deemed to be -$24,139.
Given the information above, what is the profitability index (PI) for this set of cash flows?
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