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))
PV of future cash flows is calculated using a financial calculator by inputting the below:
The present value of cash flows is $10,026.62.
Profitability Index= $10,026.62/$67,334= 0.15.
Therefore, the profitability index is 0.149.
In case of any query, kindly comment on the solution.
Get Answers For Free
Most questions answered within 1 hours.