Question
Given the following regarding ABC corp. & XYZ corp.: ABC 2020 2021 2022 2023 Op Cash 50000 55000 60000 62000 Cap Ex 20000 21000 25000
Given the following regarding ABC corp. & XYZ corp.:
| ABC | 2020 | 2021 | 2022 | 2023 |
| Op Cash | 50000 | 55000 | 60000 | 62000 |
| Cap Ex | 20000 | 21000 | 25000 | 26000 |
| Dividends | 10000 | 12000 | 13000 | 15000 |
| XYZ | 2020 | 2021 | 2022 | 2023 |
| Op Cash | 50000 | 55000 | 60000 | 62000 |
| Cap Ex | 5000 | 4000 | 2500 | 2000 |
| Dividends | 0 | 0 | 0 | 0 |
Required investment: ABC = $50,000, XYZ = $150,000.
Discount rate = 4%
Calculate the Profitability Index for ABC
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Auditing And Assurance Services
Authors: Timothy Louwers, Penelope Bagley, Allen Blay, Jerry Strawser, Jay Thibodeau
8th International Edition
1260570517, 978-1260570519
