Question
Muffins co. is considering to modernize its production facilities and it has two proposals under consideration. The expected cash flows associated with these projects is
Muffins co. is considering to modernize its production facilities and it has two proposals under consideration. The expected cash flows associated with these projects is as follows. The discount rate associated with both the projects is 12%.
Calculate profitability index for proposal 1
| Years | Proposal 1- $ | Proposal 2- $ |
| 0 | (40,000) | (64000) |
| 1 | 18000 | 10000 |
| 2 | 24000 | 32000 |
| 3 | 32000 | 19000 |
| 4 | 11000 | 25000 |
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Intermediate Financial Management
Authors: Brigham, Daves
10th Edition
978-1439051764, 1111783659, 9780324594690, 1439051763, 9781111783655, 324594690, 978-1111021573
