SkyTech Innovations is evaluating a new software development project. The project has an initial cost of $75,000, with expected net cash inflows of $12,000 per year for 10 years. The company's cost of capital is 10%. What is the project's Profitability Index (PI)? Show your work.

SkyTech Innovations is evaluating a new software development project. The project has an initial cost of $75,000, with expected net cash inflows of $12,000 per year for 10 years. The company's cost of capital is 10%. What is the project's Profitability Index (PI)? Show your work.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter19: Capital Investment

Section: Chapter Questions

Problem 15E: Gina Ripley, president of Dearing Company, is considering the purchase of a computer-aided...

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Need answer financial accounting question ?

SkyTech Innovations is evaluating a new software
development project.
The project has an initial cost of $75,000, with expected
net cash inflows of $12,000 per year for 10 years.
The company's cost of capital is 10%.
What is the project's Profitability Index (PI)? Show your
work.

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