Question
Using the cash flow values in the table below, calculate the Profitability Index (PI). Assume a discount rate of 9.7%. Year Cash Flow 0 -$39,000
Using the cash flow values in the table below, calculate the Profitability Index (PI).
Assume a discount rate of 9.7%.
| Year | Cash Flow |
| 0 | -$39,000 |
| 1 | 6,836 |
| 2 | 13,000 |
| 3 | 9,000 |
| 4 | 11,000 |
| 5 | 9,314 |
HINT: First calculate the NPV.
Do not round intermediate values. Enter your answer as a number with 2 decimal places of precision (i.e. 1.23 or 0.12)).
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Advanced Finance
Authors: Michael Fardon
1st Edition
1872962319, 1872962173, 978-1872962313, 978-1872962177
