Question
Profitability index . Given the discount rate and the future cash flow of each project listed in the following table, use the PI to determine
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 | -$1,800,000 | $2,700,000 | |||
| Year 1 | $500,000 | $1,350,000 | |||
| Year 2 | $600,000 | $1,250,000 | |||
| Year 3 | $700,000 | $1,150,000 | |||
| Year 4 | $800,000 | $1,050,000 | |||
| Year 5 | $900,000 | $950,000 | |||
| Discount rate | 8% | 14% | |||
What is the PI of project A?___________ (Round to two decimal places.)
What is the PI of project B?____________ (Round to two decimal places.)
Should Project A or project B be accepted?_____________
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Cloud Security Auditing
Authors: Suryadipta Majumdar, Taous Madi, Yushun Wang, Azadeh Tabiban, Momen Oqaily, Amir Alimohammadifar, Yosr Jarraya, Makan Pourzandi, Lingyu Wang, Mourad Debbabi
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3030231305, 978-3030231309
