A project has an initial cost of $70,000, expected net cash inflows of $15,000 per year for 9 years, and a cost of capital of 10%. What is the project's profitability index (PI)?

Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter12: Capital Budgeting: Decision Criteria
Section: Chapter Questions
Problem 1P: A project has an initial cost of 40,000, expected net cash inflows of 9,000 per year for 7 years,...
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A project has an initial cost of...accounting questions

A project has an initial cost of $70,000, expected net cash
inflows of $15,000 per year for 9 years, and a cost of capital
of 10%.
What is the project's profitability index (PI)?
Transcribed Image Text:A project has an initial cost of $70,000, expected net cash inflows of $15,000 per year for 9 years, and a cost of capital of 10%. What is the project's profitability index (PI)?
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