3. A Project X initially costing $ 250,000 generates following cash flows. If the cost of capital is 12%, calculate a) Net Present Value b) Profitability Index of the project. Year Cash flow I 90,000 II 80,000 III 70,000 IV 60,000 V 50,000 Whether the project should be accepted or not?

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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3. A Project X initially costing $ 250,000 generates following cash flows. If the cost of capital is 12%, calculate a) Net Present Value b) Profitability Index of the project.
 
 
 
Year
 
Cash flow
 
I
 
90,000
 
II
 
80,000
 
III
 
70,000
 
IV
 
60,000
 
V
 
50,000
 
 
 
              Whether the project should be accepted or not?  
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