Assume the firm invests $125,000 today to get $35,000 at Year 1 (i.e. one year...
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Assume the firm invests $125,000 today to get $35,000 at Year 1 (i.e. one year from now), $26,000 at Year 2, $35,000 at Year 3, $53,000 at Year 4,$31,500 at Year 5, and $32,500 at Year 6. Assuming the required rate of return for the firm's industry is 11.5%, what is this project's profitability index? 1.18 1.21 1.36 0.92 Same facts as above, but assume that the firm expands its investment such that the revenues will go up by 20%, but the discount rate will also increase to 16.7%. What is the new profitability index? 1.41 1.18 C. 1.22 0.85
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