The following information. . Please provide answer The following information is available for a potential investment for Panda Company.Initial investment$95,000Net annual cash inflow 20,000Net present value36,224Salvage value10,00010 yrs.Useful lifeThe potential investment's profitability index is:a. 4.75.b. 3.22.C. 2.62.d. 1.38.

Profitability Index = (Net Present Value + Initial Investment)/Initial Investment Profitability…

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Calculate the internal rates of return of the following investment: Net investment -$1,100 Year 0 Net cash flows +6,500 Year 1 -11,400 Year 2 +6,000 Year 3 Round your answers to the nearest whole number and enter them in ascending order. IRR1: 0% IRR2: % IRR3: %
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Mountain Brook Company is considering two investment opportunities whose cash flows are provided below: Investment A Investment B Year Year 0 ($15,000) ($9,000) Year 1 5,000 5,000 Year 2 5,000 4,000 Year 3 5,000 3,000 Year 4 4,000 1,000 The company's hurdle rate is 12%. What is the present value index of Investment A? A. 0.97 B. 1.00 C. 1.01 D. 1.12
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The following information is available for a potential investment for Panda Company. Initial investment $95,000 Net annual cash inflow 20,000 Net present value 36,224 Salvage value 10,000 10 yrs. Useful life The potential investment's profitability index is: a. 4.75. b. 3.22. C. 2.62. d. 1.38.