Problem 5-7 Calculating Profitability Index Vince plans to open a self-serve grooming center in a storefront. The grooming equipment will cost $425,000, to be paid immediately. Vince expects aftertax cash Inflows of $92,000 annually for eight years, after which he plans to scrap the equipment and retire to the beaches of Nevis. The first cash Inflow occurs at the end of the first year. Assume the required return is 12 percent. What is the project's PI? (Do not round Intermediate calculations. Round your answer to 3 decimal places, e.g., 32.161.) PI
Problem 5-7 Calculating Profitability Index Vince plans to open a self-serve grooming center in a storefront. The grooming equipment will cost $425,000, to be paid immediately. Vince expects aftertax cash Inflows of $92,000 annually for eight years, after which he plans to scrap the equipment and retire to the beaches of Nevis. The first cash Inflow occurs at the end of the first year. Assume the required return is 12 percent. What is the project's PI? (Do not round Intermediate calculations. Round your answer to 3 decimal places, e.g., 32.161.) PI
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:Problem 5-7 Calculating Profitability Index
Vince plans to open a self-serve grooming center in a storefront. The grooming
equipment will cost $425,000, to be paid immediately. Vince expects aftertax cash
Inflows of $92,000 annually for eight years, after which he plans to scrap the equipment
and retire to the beaches of Nevis. The first cash Inflow occurs at the end of the first
year. Assume the required return is 12 percent. What is the project's PI? (Do not round
Intermediate calculations. Round your answer to 3 decimal places, e.g., 32.161.)
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