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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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?
Transcribed Image Text: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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