Question

Find the profitability index (PI) for the following series of future cash flows, assuming the company's cost of capital is 10.95 percent. The initial outlay is $468,783.

Year 1: 137,140

Year 2: 160,686

Year 3: 141,697

Year 4: 187,086

Year 5: 124,349

Round the answer to two decimal places.

Answer #1

Profitability index is a ratio of the discounted cash flow to the initial cash flow of the project. It is calculated using the below formula:

Profitability Index= PV of future cash flows/Initial investment

Net present value is calculated using a financial calculator by inputting the below:

- Press the CF button.
- CF0= -$468,783.
- Cash flow for each year should be entered.
- Press Enter and down arrow after inputting each cash flow.
- After entering the fifth cash flow cash flow, press the NPV button and enter the interest rate of 10.95%.
- Press enter after that. Press the down arrow and CPT buttons to get the net present value.

The present value of cash flows is
**$86,527.08.**

Profitability Index= $86,527.08/ $468,783 =
**0.18**

Find the profitability index (PI) for the following series of
future cash flows, assuming the company’s cost of capital is 14.20
percent. The initial outlay is $495,936.
Year 1: $148,027
Year 2: $167,396
Year 3: $164,126
Year 4: $172,109
Year 5: $149,333
Round the answer to two decimal places.

find the profitablity index for the following series of cash
flows assuming the company's cost of capital is 8.03 percent. the
initial outlay is 361661
Cost of
Capital
Initial
Outlay
486,488.00
Year 1
120,191.00
Year 2
161,639.00
Year 3
133,279.00
Year 4
130,393.00
Year 5
136,847.00

Find the modified internal rate of return (MIRR) for the
following series of future cash flows if the company is able to
reinvest cash flows received from the project at an annual rate of
12.92 percent. the initial outlay is $439,500.
Year 1: $130,600
year 2: 178,600
year3: 147,800
Year 4: 133,600
Year 5: 155,700
Round answer to two decimal places.

6B4
A project has an initial outlay of $3,480. It has a single
payoff at the end of year 3 of $9,922. What is the net present
value (NPV) of the project if the company’s cost of capital is
11.97 percent?
6C4
Find the modified internal rate of return (MIRR) for the
following series of future cash flows if the company is able to
reinvest cash flows received from the project at an annual rate of
11.59 percent.The initial outlay...

Find the modified internal rate of return (MIRR) for the
following series of future cash flows if the company is able to
reinvest cash flows received from the project at an annual rate of
13.72 percent.The initial outlay is $470,600.
Year 1: $185,900
Year 2: $185,100
Year 3: $125,700
Year 4: $183,400
Year 5: $184,100
Round the answer to two decimal places in percentage
form.
How do I do this in excel?

6c1
A project has an initial outlay of $2,154. It has a single cash
flow at the end of year 8 of $4,834. What is the internal rate of
return (IRR) for the project?
Round the answer to two decimal places in percentage
form. (Write the percentage sign in the
"units" box)
6b1
Find the net present value (NPV) for the following series of
future cash flows, assuming the company’s cost of capital is 14.71
percent. The initial outlay is...

Profitability Index
A project has an initial cost of $73,575, expected net cash
inflows of $14,000 per year for 9 years, and a cost of capital of
8%. What is the project's PI? Do not round your intermediate
calculations. Round your answer to two decimal places.

A project has an initial investment of $203,700 and will
generate 5 annual cash flows of $59,800.
Assume a cost of capital of 15.1 %
Calculate the profitability index (PI).
The present value of the cash inflows is
$___.
(Round to the nearest cent.)
The profitability index is ___.
(Round to two decimal places.

Profitability index
Estimating the cash flow generated by $1 invested in
investment
The profitability index (PI) is a capital budgeting tool that
provides another way to compare a project’s benefits and costs. It
is computed as a ratio of the discounted value of the net cash
flows expected to be generated by a project over its life (the
project’s expected benefits) to its net cost (NINV). A project’s PI
value can be interpreted to indicate a project’s discounted return
generated...

Profitability Index
A project has an initial cost of $55,075, expected net cash
inflows of $15,000 per year for 12 years, and a cost of capital of
8%. What is the project's PI? (Hint: Begin by constructing
a time line.) Do not round intermediate calculations. Round your
answer to two decimal places.

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 21 minutes ago

asked 25 minutes ago

asked 41 minutes ago

asked 48 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 1 hour ago

asked 1 hour ago