Profitability index. Given the discount rate and the future cash flow of each project listed in the following table, E, use the PI to determine which projects the company should accept. 1 Data Table (Click on the following icon in order to copy its contents into a spreadsheet.) Project B - $2,600,000 Cash Flow Project A Year 0 - $2,200,000 Year 1 $300,000 $1,300,000 Year 2 $500,000 $1,100,000 $700,000 $900,000 Year 3 $900,000 Year 4 $700,000 Year 5 $1,100,000 $500,000 Discount rate 8% 15%
Profitability index. Given the discount rate and the future cash flow of each project listed in the following table, E, use the PI to determine which projects the company should accept. 1 Data Table (Click on the following icon in order to copy its contents into a spreadsheet.) Project B - $2,600,000 Cash Flow Project A Year 0 - $2,200,000 Year 1 $300,000 $1,300,000 Year 2 $500,000 $1,100,000 $700,000 $900,000 Year 3 $900,000 Year 4 $700,000 Year 5 $1,100,000 $500,000 Discount rate 8% 15%
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:Profitability index. Given the discount rate and the future cash flow of each project listed in the following table, , use the Pl to determine which projects the
company should accept.
Data Table
(Click on the following icon e in order to copy its contents into a spreadsheet.)
Cash Flow
Project A
Project B
Year 0
- $2,600,000
- $2,200,000
$300,000
$1,300,000
$1,100,000
Year 1
Year 2
$500,000
Year 3
$700,000
$900,000
Year 4
$900,000
$700,000
Year 5
$1,100,000
$500,000
Discount rate
8%
15%
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