Question
Do not do any interim rounding, state your answer to two decimal places. Dawntreader Landscaping is considering purchasing $490,000 of new lawn equipment and they
Do not do any interim rounding, state your answer to two decimal places.
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 8.75%.
| Year | Cash flow |
| 1 | 87,000 |
| 2 | 113,000 |
| 3 | 137,000 |
| 4 | 152,000 |
| 5 | 168,000 |
The profitability index for the project is:
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Financial Accounting A Focus On Interpretation And Analysis
Authors: Richard F Kochanek, A Douglas Hillman
7th Edition
1111061750, 9781111061753
