![tthompson7186](/avatars/29102.jpg)
tthompson7186
27.07.2019 •
Business
The black horse is currently considering a project that will produce cash inflows of $12,000 a year for three years followed by $6,500 in year four. the cost of the project is $38,000. what is the profitability index if the discount rate is 7 percent? 0.96 0.99 1.04 1.09 1.12
Solved
Show answers
More tips
- F Food and Cooking How to Make Mayonnaise at Home? Secrets of Homemade Mayonnaise...
- C Computers and Internet Which Phone is Best for Internet Surfing?...
- F Food and Cooking Everything You Need to Know About Pasta...
- C Computers and Internet How to Choose a Monitor?...
- H Horoscopes, Magic, Divination Where Did Tarot Cards Come From?...
- S Style and Beauty How to Make Your Lips Fuller? Ideas and Tips for Beautiful Lips...
- C Computers and Internet How to Learn to Type Fast?...
- A Art and Culture Who Said The Less We Love a Woman, the More She Likes Us ?...
Answers on questions: Business
- H History What was one reason madison and jefferson opposed the idea of a national bank?...
- S Social Studies When sending a non-audience specific message to a large group of people, you are engaging in which type of communication?...
- M Mathematics a standard six-sided die is rolled. what is the probability that the value of the second die is higher than the first...
- E English Which of the following is an example of a civic responsibility? buying a house voting in elections getting job retirement...
Ответ:
To best compute this problem, use your financial calculation to input the initial outflow (investment) of $38,000 and the four cash inflows ($12,000 in each of Yr 1, 2, and 3, and $6,500 in Yr 4). Then use the NPV calculation with the 7% discount rate to find the NPV for the project of -$1,549.
Using this NPV along with the initial investment, compute the profitability index by adding the NPV and the initial investment then dividing this sum by the initial investment.
profitability index = (NPV + initial investment) / initial investment
0.96 = (-$1,549 + $38,000) / $38,000
Ответ: