Question

What is the profitability index of a project with the following cash flows if the discount rate is 10 percent? Year CFs 0 -802 1 761 2 497 3 376

Answer #1

What is the profitability index for the following set of cash
flows if the relevant discount rate is 10 percent? What if the
discount rate is 15 percent? If it is 22 percent? Year Cash
Flow
0 -16,700
1-9,700
2 -7,800
3 - 4,300

Based on the profitability index rule, should a project with the
following cash flows be accepted if the discount rate is 15
percent? Why or why not? (i.e. Calculate the profitability index
(PI) and explain why the project should or should not be
accepted.)
Year: 0,1,2,3
Cash Flow: -32100, 11,800, 0, 22,600

Year Cash Flows 0 -67334 1 30908 2 31393 3 31036 What is the
profitability index for the set of cash flows if the relevant
discount rate is 10 percent? (Do not round intermediate
calculations and round your final answer to 3 decimal places.
(e.g., 32.161))

Profitability index. Given the discount rate and the future cash
flow of each project listed in the following table, use the PI to
determine which projects the company should accept.
What is the PI of project A?
What is the PI of Project B?
Cash Flow
Project A
Project B
Year 0
−$2,000,000
−$2,300,000
Year 1
$600,000
$1,150,000
Year 2
$700,000
$1,050,000
Year 3
$800,000
$950,000
Year 4
$900,000
$850,000
Year 5
$1,000,000
$750,000
Discount rate
5%
16%

Given the following cash flows.
A profitability index equal to 1.164615
A12% discount rate.
Estimate the initial outlay and the MIRR.
Years
CFt
0
XXX,000?
1
$275,000
2
$275,000
3
$275,000
4
$275,000
5
$275,000
6
$0
7
($150,000)

Year
Cash Flows
0
-17189
1
11331
2
9978
3
6764
What is the profitability index for the set of cash flows if the
relevant discount rate is 9 percent? (Do not round
intermediate calculations and round your final answer to 3 decimal
places. (e.g., 32.161))

Year Cash Flows 0 -18265 1 11583 2 9838 3 6164 What is the
profitability index for the set of cash flows if the relevant
discount rate is 9 percent? (Do not round intermediate calculations
and round your final answer to 3 decimal places. (e.g.,
32.161))

Based on the profitability index (PI) rule, should a project
with the following cash flows be accepted if the discount rate is
8%? Why Year or why not? Cash Flow $18,600 S10,000 I$7,300 I$3,700
2 yes,because the Pl is 1.008 yes; because the Pl is 0.992. yes;
because the Pl is 0.999 no; because the Pl is 1.008 no because the
Pl is 0,992

Year Cash Flow
0 −$9,100
1 5,300
2 5,700
3 4,900
a. What is the profitability index for the cash flows if the
relevant discount rate is 8 percent?
b. What is the profitability index for the cash flows if the
relevant discount rate is 19 percent?
c. What is the profitability index for the cash flows if the
relevant discount rate is 23 percent?
Please be very specific in where you found each number

What´s the probability index (PI) for the following set of cash
flows if the relevant discount rate is 18%.
0. year = 50 000$ (initial investment) 1.year = 18 000$ 2.year =
17 500$ 3. year = 18 500$
Is this project feasible or not according to PI?

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 6 minutes ago

asked 8 minutes ago

asked 8 minutes ago

asked 17 minutes ago

asked 46 minutes ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 2 hours ago