Project 2

The opportunity cost of capital is 9%. The initial cost of the project is $480,000 and generates the following cash flows: $200,000 in year 1, $150,000 in year 2, $190,000 in year 3, and $80,000 in year 4.

What is the Profitability Index of Project 2?

Select one:

a. Less than 0.10

b. Between 0.10 and 0.20

c. Between 0.20 and 0.30

d. Between 0.30 and 0.40

e. Greater than 0.50