Question
PLEASE ANSWER ACCORDING TO THE PARAMETERS: (Do not round intermediate calculations. Round your answers to 4 decimal places.) The following are the cash flows of
| PLEASE ANSWER ACCORDING TO THE PARAMETERS: (Do not round intermediate calculations. Round your answers to 4 decimal places.) The following are the cash flows of two projects: |
| Year | Project A | Project B | |||||||||
| 0 | $ | 350 | $ | 350 | |||||||
| 1 | 180 | 250 | |||||||||
| 2 | 180 | 250 | |||||||||
| 3 | 180 | 250 | |||||||||
| 4 | 180 | ||||||||||
|
| |||||||||||
| If the opportunity cost of capital is 11%, what is the profitability index for each project? |
| Project | Profitability index |
| A | |
| B | |
|
| |
| Is the project with the highest profitability index also the one with the highest NPV? | ||||
|
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International Finance Theory And Policy
Authors: Paul R. Krugman, Maurice Obstfeld, Marc Melitz
11th Global Edition
1292238739, 978-1292238739
