1. What is the profitability index of a project that has an initial cash outflow...
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Finance
1. What is the profitability index of a project that has an initial cash outflow of $550, an inflow of $230 for the next 3 years and a cost of capital of 8 percent?
| A. | 0.667 | |
| B. | 1.765 | |
| C. | 1.078 | |
| D. | 2.739 |
2.
What is the NPV for a project whose cost of capital is 12 percent and initial after-tax cost is $5,000,000 and is expected to provide after-tax operating cash inflows of $1,600,000 in year 1, $1,900,000 in year 2, $1,700,000 in year 3, and $1,500,000 in year 4?
| A. | $106,543 | |
| B. | -$196,615 | |
| C. | -$137,053 | |
| D. | $4,862,947 |
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