Profitability Index A project has an initial cost of $40,000, expected net cash inflows of $12,000 per year for 7 years, and a cost of capital of 9%. What is the project's PI? (Hint: Begin by constructing a time line.) Do not round intermediate calculations. Round your answer to two decimal places.
Profitability Index A project has an initial cost of $40,000, expected net cash inflows of $12,000 per year for 7 years, and a cost of capital of 9%. What is the project's PI? (Hint: Begin by constructing a time line.) Do not round intermediate calculations. Round your answer to two decimal places.
Chapter1: Making Economics Decisions
Section: Chapter Questions
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![Profitability Index
A project has an initial cost of $40,000,
expected net cash inflows of $12,000
per year for 7 years, and a cost of
capital of 9%. What is the project's PI?
(Hint: Begin by constructing a time line.)
Do not round intermediate calculations.
Round your answer to two decimal
places.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fe9d9a5f0-fe4e-422d-8c50-a22c93ec0936%2F408be7e6-bfaf-4e21-a1fa-42f3a8f9465f%2Fs1rf37_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Profitability Index
A project has an initial cost of $40,000,
expected net cash inflows of $12,000
per year for 7 years, and a cost of
capital of 9%. What is the project's PI?
(Hint: Begin by constructing a time line.)
Do not round intermediate calculations.
Round your answer to two decimal
places.
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