Consider an investment with the following cash flows: Year Cashflows PV of P 1 @ 14% 0 (P 31,000) 1.000 1 10,000 .877 2 20,000 .770 3 10,000 .675 4 10,000 .592 Salvage value 5,000 The cost of capital is 14%. What is the profitability index (PI)? 1.842 1.824 1.482 1.284
Consider an investment with the following cash flows: Year Cashflows PV of P 1 @ 14% 0 (P 31,000) 1.000 1 10,000 .877 2 20,000 .770 3 10,000 .675 4 10,000 .592 Salvage value 5,000 The cost of capital is 14%. What is the profitability index (PI)? 1.842 1.824 1.482 1.284
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter19: Capital Investment
Section: Chapter Questions
Problem 23E: Assume that an investment of 100,000 produces a net cash flow of 60,000 per year for two years. The...
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Consider an investment with the following cash flows: Year Cashflows PV of P 1 @ 14% 0 (P 31,000) 1.000 1 10,000 .877 2 20,000 .770 3 10,000 .675 4 10,000 .592 Salvage value 5,000 The cost of capital is 14%. What is the profitability index (PI)?
1.842
1.824
1.482
1.284
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