Question

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

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**Answer:**

discount rate = 10%

profitability index = pv of future cash flows/initial
investment

= (9700/1.1 + 7800/1.1^2 + 4300/1.1^3)/16700

=1.1075

discount rate = 15%

profitability index = pv of future cash flows/initial
investment

= (9700/1.15 + 7800/1.15^2 + 4300/1.15^3)/16700

=1.027546

discount rate = 22%

profitability index = pv of future cash flows/initial
investment

= (9700/1.22 + 7800/1.22^2 + 4300/1.22^3)/16700

= 0.9317

Year 0 = Cash Flow -$16,700 Year 1 = Cash Flow $9,700 Year 2 =
Cash Flow $7,800 Year 3 = Cash Flow $4,400
What is the profitability index for the set of cash flows if the
relevant discount rate is 10 percent? What is the profitability
index for the set of cash flows if the relevant discount rate is 15
percent? What is the profitability index for the set of cash flows
if the relevant discount rate is 22...

What is the profitability index of a project with the following
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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
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c. What is the profitability index for the
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Year
Cash Flow
0
−$7,600
1
3,200
2
4,300
3
2,400
a. What is the profitability index for the cash
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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
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What´s the probability index (PI) for the following set of cash
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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))

Year
Cash Flow
0
–$
18,500
1
10,800
2
9,700
3
6,200
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 answer to 3 decimal
places, e.g., 32.161.)
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Year
Cash Flow
0
−$8,400
1
5,600
2
3,600
3
5,100
a. What is the profitability index for the cash
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b. What is the profitability index for the cash
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c. What is the profitability index for the cash
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Year Cash Flow
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1 2,600
2 3,500
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a. What is the profitability index for the cash flows if the
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Multiple Choice
0.974
0.993
0.899
0.917
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Multiple Choice
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c. What is the profitability index for the cash
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Cash Flows
0
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1
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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))

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