Calculate the Profitability Index of the project. The profitability index weights the PV of future cash flows by the initial investment in order to rank projects by return to each dollar invested. Would the project be accepted?

t	Cash Flow
0	$(40,000.00)
1	$ 10,000.00
2	$ 10,000.00
3	$ 11,000.00
4	$ 17,000.00
5	$ 12,000.00
Cost of Capital	14%
Reinvest. Rate	8%
NPV	$ 189.08
IRR	14.18%
MIRR	11.65%

Answer rating: 100% (QA)

To calculate the Profitability Index PI of the project we need to divide the present va... View the full answer