Question: P Ltd. is considering a new project with an initial outlay of `70,000. The project has a lifespan of 4 years with Cash Inflows of

● P Ltd. is considering a new project with an initial outlay of `70,000. The project has a lifespan of 4 years with Cash Inflows of `25,000, `30,000, `18,000 and `16,000 for year 1, 2, 3 and 4, respectively.

Calculate the Profitability Index for the project if the Cost of Capital is 10% p.a.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Financial Management Questions!

Snow Pty Ltd is considering an investment project with an initial outlay of $110 000. Listed below are the estimated cash flows relevant to the project. The cash flows are equal to net profit before...

Sutton Pty Ltd is considering an investment project with an initial outlay of $110 000. Listed below are the estimated cash flows relevant to the project. The cash flows are equal to net profit...

Hi Tutor i want ask about this attachment Part B Problem 1 (a). This is FINM2401 Semester One Final Examinations, 2012 FINM2401 Financial Management Venue ____________________ Seat Number ________...

5) Which of the following statements is FALSE? Select one: A. Once a capital project is approved, the role of a financial manager is still essential B. Capital projects are a long term investment C....

1. In recording accounting transactions, evidence that a transaction has taken place is obtained from: a. Source documents. b. The trial balance. c. The ledger. d. The journal. 2. Which of the...

Apple, Inc is considering Project A and Project B, which are two mutually exclusive projects with unequal lives Project A is an eight-year project that lias an initial outlay or cost of $140, 000 Its...

Problem 01. 1. Your portfolio consists of 250 shares of Stock K with a current market price of $40 per share, 150 shares of Stock Q with a current market price of $25 per share and $8,000 invested in...

Acme, Inc. is considering a four year project that has initial outlay or cost of $100, 000 The respective rash inflows for years 1, 2, 3 and 4 are: $50, 000, $40, 000, $30, 000 and $20, 000. Acme...

Operation Phakisa is a South African government initiative envisaging that aims to fast-track certain projects and initiatives. One of the focus areas is the Oceans Economy, which boasts a wide...

4. 3. Feed is measured in units of a) length/revolution b) degree/revolution c) length d) velocity tosido sdi to oilal tosido sit to no301 v aizs is out tuods tosido srit vd boilines 5. 6. Which of...

The Children's Company manufactures and sells footballs for kids. Currently, 400,000 units are produced and sold per year at a price of 17.50 per unit. Annual fixed costs are 900,000. Unit variable...

What is the starting point in preparing a Production Budget? Direct materials required Beginning inventory Desired ending inventory Budgeted sates

Two elementary particles pass each other moving in opposite directions, each moving at speed $0.800 c_{0}$ relative to Earth. What is the speed of one particle relative to the other?

Are liquidations likely to be more common for public utility, railroad, or industrial corporations? Why?

The Verbrugge's Publishing Company's 2004 balance sheet and income statement are as follows (in millions of dollars). Verbrugge's and its creditors have agreed upon a voluntary reorganization plan....

What insights or questions do you have about bank confirmations?

Required Calculate appraisal cost. Calculate internal failure cost. Calculate out - of - pocket external failure cost. Determine the opportunity cost associated with the external failures. What are...

The followings are the details of dividends declared by UCHI for year ending 3 1 December 2 0 2 2 : Date announced Type of dividend Dividend per share ( sen ) Ex - Dividend date Lodgment date Payment...