Bill plans to open a self-serve grooming center in a storefront. The grooming equipment will cost $207,000. Bill expects after tax cash inflows of $64,000 annually for seven years, after which he plans to scrap the equipment and retire to the beaches of Nevis. The first cash inflow occurs at the end of the first year. Assume the required return is 15 percent. What is the project’s PI? Should it be accepted?

Answer rating: 100% (QA)

The profitability index measures the ratio between the present value of future cash flows and the in... View the full answer