Question
Dawntreader Landscaping is considering purchasing $175,000 of new lawn equipment and they anticipate the additional equipment will result in cash flows as below. Their weighted
Dawntreader Landscaping is considering purchasing $175,000 of new lawn equipment and they anticipate the additional equipment will result in cash flows as below. Their weighted average cost of capital is 8.75%.
| Year | Cash flow |
| 1 | 36,000 |
| 2 | 41,000 |
| 3 | 45,000 |
| 4 | 53,000 |
| 5 | 58,000 |
The profitability index for the project is:
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Essentials Of Managerial Finance
Authors: Scott Besley, Eugene F. Brigham
13th Edition
0324258755, 9780324258752
