Consider a project with the following cash flows Calculate the Profitability Index (PI) if the discount rate is 8 Cash Flows Year 0 $30,000 Year 1 $7,000 Year 2 $8,000 Year 3 $9,000 Year 4 $10,000 Year 5 $12,000 Requirements Calculate the PI Determine if the project is viable Explain the relationship between NPV and PI Analyze the impact if the discount rate changes to 10

Question: Consider a project with the following cash flows. Calculate the Profitability Index (PI) if the discount rate is 8%. Cash Flows: Year 0: -$30,000 Year

Consider a project with the following cash flows. Calculate the Profitability Index (PI) if the discount rate is 8%.

Cash Flows:

Year 0: -$30,000
Year 1: $7,000
Year 2: $8,000
Year 3: $9,000
Year 4: $10,000
Year 5: $12,000

Requirements:

Calculate the PI.
Determine if the project is viable.
Explain the relationship between NPV and PI.
Analyze the impact if the discount rate changes to 10%.

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