Question
Hi please help! I am looking for: - The PI of Project A? And if it should be accepted or rejected -The PI of Project
Hi please help!
I am looking for:
- The PI of Project A? And if it should be accepted or rejected
-The PI of Project B? And if it should be accepted or rejected
Profitability
index.
Given the discount rate and the future cash flow of each project listed in the following table, use the PI to determine which projects the company should accept.
Cash Flow | Project A | Project B |
| ||
Year 0 | minus$1 comma 800 comma 0001,800,000 | minus$2 comma 300 comma 0002,300,000 | |||
Year 1 | $100 comma 000100,000 | $1 comma 150 comma 0001,150,000 | |||
Year 2 | $300 comma 000300,000 | $950 comma 000950,000 | |||
Year 3 | $500 comma 000500,000 | $750 comma 000750,000 | |||
Year 4 | $700 comma 000700,000 | $550 comma 000550,000 | |||
Year 5 | $900 comma 000900,000 | $350 comma 000350,000 | |||
Discount rate | 88% | 1818% |
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