Logo
Home Study Material Contact Search
AI Chat FREE
  1. engineering
  2. mechanical engineering
  3. what is profitability index? given the discount ra

What is profitability Index? Given the discount rates and the future cash flows of each project,...

60.1K

Verified Solution

Question

Mechanical Engineering

What is profitability Index? Given the discount rates and thefuture cash flows of each project, which project should they acceptusing Profitability Index?

Cash Flows

Project A

Project B

Project C

Project D

Year Zero

- $ 1,500,000

- $ 1,500,000

- $ 2,000,000

- $ 2,000,000

Year One

$ 350,000

$ 400,000

$ 700,000

$ 200,000

Year Two

$ 350,000

$ 400,000

$ 600,000

$ 400,000

Year Three

$ 350,000

$ 400,000

$ 500,000

$ 600,000

Year Four

$ 350,000

$ 400,000

$ 400,000

$ 800,000

Year Five

$ 350,000

$ 400,000

$ 300,000

$ 1,000,000

Discount Rate

4%

8%

13%

18%

Answer & Explanation Solved by verified expert
3.7 Ratings (337 Votes)
The profitability index is an index that    See Answer
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Medical Sciences
1.2K views

Describe how innate and adaptive immunity differ and list 4 characteristics of each within your description. Then explain...

Statistics
1.2K views

15 What are the three roles of prices in a market system

Calculus
1.2K views

Write the first five terms of the sequence defined recursively a 27 ak 1 ak...

Algebra
1.2K views

Solve and check the equation Points 5 10 2x7 2 4 0

Algebra
1.2K views

A 32 Michelle invested 10 000 in an account that earns 8 5 interest that...

Accounting
1.2K views

Which of the following statements about the application of IFRS in accordance with The...

Accounting
1.2K views

4. A Company uses the periodic system for inventory. A began July 2023 with inventory...

Accounting
1.2K views

Murri Corporation has an activity-based costing system with three activity cost pools-Processing, Setting Up, and...

Accounting
1.2K views

I need help understanding the steps to arrive at each of the answers. Assume...

Finance
1.2K views

The person who borrows money from a bank to buy a house is called: Group...

Accounting
1.2K views

When a constraint line bounding a feasible region has the same slope as an isoprofit...

Finance
1.2K views

Styles Paragraph (4pts) 8. LeBron holds the following portfolio: Stock Beta Investment $100,000 $100,000 $200,000...