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Donaldson Mfg. is considering a capital budgeting project with a cost of capital of 10% and the following expected cash flow pattern: Time 0 1
Donaldson Mfg. is considering a capital budgeting project with a cost of capital of 10% and the following expected cash flow pattern:
Time | 0 | 1 | 2 | 3 | 4 | 5 |
Cash flow | -100 | 25 | 50 | 50 | 25 | 10 |
What is the profitabiity index of this project?
0.75
1.25
1.22
1.35
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