I want to correct answer accounting A company has a minimum required rate of return of 9%. It isconsidering investing in a project that costs $50,000 and isexpected to generate cash inflows of $20,000 at the end of eachyear for 3 years. The profitability index for this project is:a. 0.99b. 1.00c. 1.01d. 1.20

Step 1: Define Profitability IndexIn the context of finance, there are various capital budgeting…

Answered: A company has a minimum required rate…

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter12: Capital Investment Analysis

Section: Chapter Questions

Problem 3CMA

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A company has a minimum required rate of return of 9%. It is considering investing in a project that costs $50,000 and is expected to generate cash inflows of $20,000 at the end of each year for 3 years. The profitability index for this project is: a. 0.99 b. 1.00 c. 1.01 d. 1.20