Consider the following cash flows: Year 0 1 2 3 Cash Flow -$ 28,700 15,000 13,900 10,300 a. What is the profitability index for the cash flows if the relevant discount rate is 12 percent? Note: Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161. b. What is the profitability index if the discount rate is 17 percent? Note: Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161. c. What is the profitability index if the discount rate is 25 percent? Note: Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161. a. Profitability index b. Profitability index c. Profitability index

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
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Chapter1: Investments: Background And Issues
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Consider the following cash flows:
Year
0
1
2
3
Cash Flow
-$ 28,700
15,000
13,900
10,300
a. What is the profitability index for the cash flows if the relevant discount rate is 12 percent?
Note: Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161.
b. What is the profitability index if the discount rate is 17 percent?
Note: Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161.
c. What is the profitability index if the discount rate is 25 percent?
Note: Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161.
a. Profitability index
b. Profitability index
c. Profitability index
Transcribed Image Text:Consider the following cash flows: Year 0 1 2 3 Cash Flow -$ 28,700 15,000 13,900 10,300 a. What is the profitability index for the cash flows if the relevant discount rate is 12 percent? Note: Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161. b. What is the profitability index if the discount rate is 17 percent? Note: Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161. c. What is the profitability index if the discount rate is 25 percent? Note: Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161. a. Profitability index b. Profitability index c. Profitability index
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