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The profitability index (PI) is a capital budgeting tool that is defined as the present value of a project's cash inflows divided by the absolute
The profitability index (PI) is a capital budgeting tool that is defined as the present value of a project's cash inflows divided by the absolute value of its initial cash outflow. Consider this case:
Fuzzy Badger Transport Company is considering investing $2,500,000 in a project that is expected to generate the following net cash flows:
Fuzzy Badger Transport Company's uses a WACC of 7% when evaluating proposed budget projects. Based on the cash flow determine this project PI (roundto four decimal places)
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