Question
Dawntreader Landscaping is considering purchasing $490,000 of new lawn equipment and they anticipate the additional equipment will result in cash flows as below. Their weighted
Dawntreader Landscaping is considering purchasing $490,000 of new lawn equipment and they anticipate the additional equipment will result in cash flows as below. Their weighted average cost of capital is 10.30%.
| Year | Cash flow |
| 1 | 87,000 |
| 2 | 113,000 |
| 3 | 129,000 |
| 4 | 146,000 |
| 5 | 162,000 |
The profitability index for the project is:
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Intermediate Accounting
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield.
9th Canadian Edition, Volume 2
470964731, 978-0470964736, 978-0470161012
