Salalah Tourism Service has taken up a new project with an initial investment of 100000 OMR.The expectedfuture cashflow from the project over the next three years will be 47000 OMR, 49000 OMR and 45000OMR.What is the profitability index if the discount rate is 14 percent?Select one:O a. 1.44O b. 1.18O c. None of theseO d. 1.09O e. 1.12

The profitability index can be calculated as follows :

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purism Service has taken up a new project shflow from the project over the next three

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 19EA: Redbird Company is considering a project with an initial investment of $265,000 in new equipment...

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Concept explainers

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.

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Salalah Tourism Service has taken up a new project with an initial investment of 100000 OMR.The expected
future cashflow from the project over the next three years will be 47000 OMR, 49000 OMR and 45000
OMR.What is the profitability index if the discount rate is 14 percent?
Select one:
O a. 1.44
O b. 1.18
O c. None of these
O d. 1.09
O e. 1.12

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