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What is the profitability index of a project that costs $60,000 today and is expected to...

What is the profitability index of a project that costs $60,000 today and is expected to generate annual cash inflows of $10,000 for the next 8 years, followed by a final inflow of $12,000 in year 9? Cost of capital is 7%.

a) 0.80 b) 0.87 c) 0.94 d) 1.01 e) 1.10

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Ans e) 1.10

The profitability index of a project that costs $60,000 today and is expected to generate annual cash inflows of $10,000 for the next 8 years, followed by a final inflow of $12,000 in year 9 is 1.10

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