What is the profitability index for an investment solve this question What is the profitability index for an investment with the followingcash flows given a 6 percent required return?Year Cash Flow0$21,00017,700210,00039,400

Step 1: Given Value for Calculation Required Rate of Return = r = 6%Cash Flow for Year 0 = cf0 =…

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EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter10: Capital Budgeting: Decision Criteria And Real Option

Section: Chapter Questions

Problem 8P

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Assume a project has cash flows of -$54,300, $18,200, $37,300, and $14,300 for Years 0 to 3, respectively. What is the profitability index given a required return of 12.6 percent? 1.02 .95 .98 1.06 ☐ 1.00
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What is the profitability index for an investment with the following cash flows given a 6 percent required return? Year Cash Flow 0 $21,000 1 7,700 2 10,000 3 9,400