Question

Year | Cash Flow |

0 | −$7,700 |

1 | 4,200 |

2 | 4,300 |

3 | 4,500 |

Required : |

(a) |
What is the profitability index for the cash flows if the relevant discount rate is 7 percent? |

(Click to select)$1.475$1.401$1.43$1.548$1.519 |

(b) |
What is the profitability index for the cashflows if the relevant discount rate is 18 percent? |

(Click to select)$1.182$1.219$1.158$1.28$1.256 |

(c) |
What is the profitability index for the cashflows if the relevant discount rate is 21 percent? |

(Click to select)1.1041.1621.1271.221.197 |

Answer #1

a.Present value of inflows=cash inflow*Present value of discounting factor(rate%,time period)

=4200/1.07+4300/1.07^2+4500/1.07^3

=11354.3606

PI=Present value of inflows/Present value of outflows

=11354.3606/7700

**=1.475(Approx).**

b.Present value of inflows=cash inflow*Present value of discounting factor(rate%,time period)

=4200/1.18+4300/1.18^2+4500/1.18^3

=9386.35401

PI=Present value of inflows/Present value of outflows

=9386.35401/7700

**=1.219(Approx).**

c.Present value of inflows=cash inflow*Present value of discounting factor(rate%,time period)

=4200/1.21+4300/1.21^2+4500/1.21^3

=8948.16492

PI=Present value of inflows/Present value of outflows

=8948.16492/7700

**=1.162(Approx).**

Year Cash Flow
0 ?$9,700
1 3,700
2 2,400
3 4,200
Required :
(a) What is the profitability index for the cashflows if the
relevant discount rate is 7 percent?
(b) What is the profitability index for the cashflows if the
relevant discount rate is 17 percent?
(c) What is the profitability index for the cashflows if the
relevant discount rate is 25 percent?

Year
Cash Flow
0
−$7,200
1
5,300
2
5,700
3
5,300
Required :
(a)
What is the profitability index for the cashflows if the
relevant discount rate is 9 percent?
(Click to select)$2.006$1.967$1.853$1.91$1.815
(b)
What is the profitability index for the cashflows if the
relevant discount rate is 17 percent?
(Click to select)$1.617$1.584$1.717$1.75$1.667
(c)
What is the profitability index for the cashflows if the
relevant discount rate is 22 percent?

Year
Cash Flow
0
−$7,800
1
4,300
2
5,200
3
3,200
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 16 percent?
c. What is the profitability index for the
cash flows if the relevant discount rate is 25 percent?

Year
Cash Flow
0
−$7,600
1
3,200
2
4,300
3
2,400
a. What is the profitability index for the cash
flows if the relevant discount rate is 11 percent?
b. What is the profitability index for the cash
flows if the relevant discount rate is 16 percent?
c. What is the profitability index for the cash
flows if the relevant discount rate is 22 percent?

Year
Cash Flow
0
−$9,700
1
3,800
2
4,600
3
5,000
Required :
(a)
What is the profitability index for the cashflows if the
relevant discount rate is 11 percent?
(b)
What is the profitability index for the cashflows if the
relevant discount rate is 16 percent?
(c)
What is the profitability index for the cashflows if the
relevant discount rate is 21 percent?

Year
Cash Flow
0
−$8,400
1
3,900
2
3,300
3
5,800
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 18 percent?
c. What is the profitability index for the
cash flows if the relevant discount rate is 23 percent?

Year
Cash Flow
0
−$8,400
1
5,600
2
3,600
3
5,100
a. What is the profitability index for the cash
flows if the relevant discount rate is 9 percent?
b. What is the profitability index for the cash
flows if the relevant discount rate is 15 percent?
c. What is the profitability index for the cash
flows if the relevant discount rate is 22 percent?

Year
Cash Flow
0
−$9,600
1
4,800
2
3,100
3
4,400
a. What is the profitability index for the
cash flows if the relevant discount rate is 11 percent?
b. What is the profitability index for the
cash flows if the relevant discount rate is 15 percent?
c. What is the profitability index for the
cash flows if the relevant discount rate is 24 percent?

2a.
Year
Cash Flow
0
–$7,400
1
3,000
2
3,500
3
3,400
Required:
(a)
What is the NPV at a discount rate of 0 percent?
(Click to
select) $2,375 $2,425 $2,500.00 $2,575 $2,625
(b)
What is the NPV at a discount rate of 11 percent?
(Click to
select) $648.31 $610.55 $660.9 $629.43 $597.96
(c)
What is the NPV at a discount rate of 24 percent?
(Click to
select) $-921.11 $-875.06 $-948.75 $-967.17 $-974.61
(d)
What is the NPV at a discount rate of 29 percent?
(Click to
select) $-1,317.98 $-1,345.72 $-1,456.71 $-1,428.97 $-1,387.35...

Year
Cash Flow
0
−$9,400
1
4,000
2
5,700
3
3,300
a. What is the profitability index for the
cash flows if the relevant discount rate is 8 percent?
1.228
1.252
1.133
1.157
1.193
b. What is the profitability index for the
cash flows if the relevant discount rate is 19 percent?
0.994
1.024
1.044
0.944
0.964
c. What is the profitability index for the
cash flows if the relevant discount rate is...

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