A project has an initial outlay of $3,798. It has a single payoff at the end of year 7 of $9,684. What is the profitability index (PI) of the project if the company's cost of capital is 14.18 percent?

A project has an initial outlay of $3,798. It has a single payoff at the end of year 7 of $9,684. What is the profitability index (PI) of the project if the company's cost of capital is 14.18 percent?

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter11: Determining The Cost Of Capital

Section: Chapter Questions

Problem 5Q: Suppose a firm estimates its overall cost of capital for the coming year to be 10%. What might be...

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Question

Financial Accounting

A project has an initial outlay of $3,798. It has
a single payoff at the end of year 7 of $9,684.
What is the profitability index (PI) of the
project if the company's cost of capital is
14.18 percent?

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