Orange Inc. is currently considering a project that will produce cash inflows of $9,000 a year for two years followed by $6,500 a year for three more years. The cost of the project is $18,000. What is the profitability index if the discount rate is 13 percent?

		1.50
		1.81
		1.71
		1.66

10 points

QUESTION 2

You are considering an investment project with the cash flows of -500 (the initial cash flow), 650 (cash flow at year 1), -100 (cash flow at year 2). Given the discount rate of 10%, compute the Modified Internal Rate of Return (MIRR) using the combination approach.

		11.56%
		11.21%
		10.78%
		10.91%