Compute the PI statistic for Project X and note whether the firm
should accept or reject the project with the cash flows shown below
if the appropriate cost of capital is 6 percent.
answers to choose from:
Ans 1.44, accept, since PI is greater than 1
|Year||Project A (i)||DF@ 6% (iii)||PV of Project A ( (i) * (iii) )|
|Total of PV of Cash Inflows||115.72|
|Profitability Index =||1.44|
|Present value of cash Inflow / Initial Investment (Cash Outflows)||(115.72 / 79)|
Get Answers For Free
Most questions answered within 1 hours.