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Question 1. Time 0 1 2 3 Investment B -$1 million $550,000 $400,000 $325,000 The timeline of an investment is shown above. If the cost
Question 1.
| Time | 0 | 1 | 2 | 3 |
| Investment B | -$1 million | $550,000 | $400,000 | $325,000 |
The timeline of an investment is shown above. If the cost of capital is 8%, what is the profitability index of this investment?
A. 0.110
B. 0.121
C. 0.275
D. 0.441
Question 2.
What is the payback period of the investment shown above?
| 1 years | ||
| 2 years | ||
| 3 years | ||
| 4 years |
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