Consider the following cash flows: Year Cash Flow 0 $-28,400 1 15,300 2 13,600 3 10,000 Requirement 1: What is the profitability index...

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Finance

Consider the following cash flows:

Year Cash Flow
0 $-28,400
1 15,300
2 13,600
3 10,000

Requirement 1:
What is the profitability index for the above set of cash flowsif the relevant discount rate is 8 percent?(Do not round intermediatecalculations. Round your answerto 3 decimal places (e.g., 32.161).)

  Profitability index


Requirement 2:
What is the profitability index if the discount rate is 13percent? (Do not round intermediatecalculations.Round your answer to 3 decimal places(e.g., 32.161).)

  Profitability index


Requirement 3:
What is the profitability index if the discount rate is 22percent? (Do not round intermediatecalculations.Round your answer to 3 decimal places(e.g., 32.161).)

  Profitability index

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3.9 Ratings (509 Votes)

Profitability Index PV of future cash flowsInitial investment Project A PV of future cash flows is calculated using a financial calculator by inputting the below Press the CF button CF0 28400 Cash flow for each year should be entered Press Enter and down arrow after inputting each cash flow After entering the last cash See Answer

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Transcribed Image Text

Consider the following cash flows: YearCash Flow0$-28,400 115,300 213,600 310,000 Requirement 1:What is the profitability index for the above set of cash flowsif the relevant discount rate is 8 percent?(Do not round intermediatecalculations. Round your answerto 3 decimal places (e.g., 32.161).) Profitability index Requirement 2:What is the profitability index if the discount rate is 13percent? (Do not round intermediatecalculations.Round your answer to 3 decimal places(e.g., 32.161).) Profitability index Requirement 3:What is the profitability index if the discount rate is 22percent? (Do not round intermediatecalculations.Round your answer to 3 decimal places(e.g., 32.161).) Profitability index