You are considering a project with an initial cash outlay of 60,000 lira and expected free cash flows of 20,000 lira at the end of each year for 5 years. The required rate of return for this project is 12%. Calculate the project's profitability index.

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter10: Capital Budgeting: Decision Criteria And Real Option
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You are considering a project
with an initial cash outlay of
60,000 lira and expected free
cash flows of 20,000 lira at the
end of each year for 5 years. The
required rate of return for this
project is 12%. Calculate the
project's profitability index.
Transcribed Image Text:You are considering a project with an initial cash outlay of 60,000 lira and expected free cash flows of 20,000 lira at the end of each year for 5 years. The required rate of return for this project is 12%. Calculate the project's profitability index.
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