Chapter 5 exercises: 1- If the total present value of cash inflow equal to 19750 and the initial investment is equal to 10000, so what is the Profitability Index (PI): A-0.658 B- 1.975 C-6750 D-3000 2- According to the profitability index criterion, all projects in which the indicator is less than one is accepted: A- True B- False 3 4 5 3- According to Internal rate of return criterion, we accept the project when IRR is greater than the cost of capital: A- True B- False Calculate the NPV and PI using the following information and decide whether to accept this project or not if K (initial investment) 20000 and r (the discount rate) = 8%: = year Cash Flow 1 2 4000 2000 1800 1000 6000 Using the data from previous question, calculate the IRR and decide whether to accept the project or not if the cost of capital is 15%.

1- If the total present value of cash inflow equal to 19750 and the initial investment is equal to 10000 , so what is the Profitability Index (PI): A- 0.658 B- 1.975 C- 6750 D- 3000 2- According to the profitability index criterion, all projects in which the indicator is less than one is accepted: A- True B- False 3- According to Internal rate of return criterion, we accept the project when IRR is greater than the cost of capital: A- True B- False - Calculate the NPV and PI using the following information and decide whether to accept this project or not if K (initial investment) =20000 and r (the discount rate) =8% : - Using the data from previous question, calculate the IRR and decide whether to accept the project or not if the cost of capital is 15%