Kuntz Company has a project that requires an initial investment of $35,000 and has the following expected

Question:

Kuntz Company has a project that requires an initial investment of $35,000 and has the following expected stream of cash flows:
Year 1 ......... $25,000
Year 2 ......... 20,000
Year 3 ......... 10,000

Required
Assuming the company’s is 12 percent, what is the profitability index for the project?

Cost Of Capital
Cost of capital refers to the opportunity cost of making a specific investment . Cost of capital (COC) is the rate of return that a firm must earn on its project investments to maintain its market value and attract funds. COC is the required rate of...