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Your firm has limited capital to invest and is therefore interested in comparing projects based on the profitability index (Pl), as well as other measures.

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Your firm has limited capital to invest and is therefore interested in comparing projects based on the profitability index (Pl), as well as other measures. What is the pl of the project with the estimated cash flows below? The required rate of return is 19.9%. Round to 3 decimals sout Year O cash flow = -870,000 Year 1 cash flow = -130,000 Year 2 cash flow = 470,000 Year 3 cash flow = 360,000 Year 4 cash flow = 360,000 Year 5 cash flow = 440,000 Answer: 0.907 X Check What is the internal rate of return (IRR) of the following set of cash flows? (Enter your answer as a percentage rounding to 2 decimals, e.g., 12.34% as 12.34) It Year 0 cash flow = -118,000 Year 1 cash flow = -23,000 Year 2 cash flow = 53,000 Year 3 cash flow = 60,000 Year 4 cash flow = 69,000 Year 5 cash flow = 55,000 X Answer: 17.81

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