Question
Principles of Finance XYZ company is considering purchasing a machine that will cost 900,000. The appropriate discount rate for this project is 15% and its
Principles of Finance
XYZ company is considering purchasing a machine that will cost 900,000. The appropriate discount rate for this project is 15% and its expects cash inflows as detailed below:
| Year 1 | Year 2 | Year 3 | Year 4 |
| $100,000 | $200,000 | $300,000 | $250,000 |
What is the profitability index for this investment? Should the project be accepted? Why or why not?
Note: The Answer should using Formula step by step not by Excel.
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Fundamentals Of Multinational Finance
Authors: Michael Moffett
6th Global Edition
1292215216, 978-1292215211
