Question: Compute the PI statistic for Project X and note whether the firm should accept or reject the project with the cash flows shown as follows

Compute the PI statistic for Project X and note whether the firm should accept or reject the project with the cash flows shown as follows if the appropriate cost of capital is 10 percent.

Time: 0 1 2 3 4 5
Cash flow: 75 75 0 100 75 50

rev: 12_16_2020_QC_CS-244227

Multiple Choice

  • 0.1896, reject

  • 10.1896, accept

  • 2, accept

  • 1.1896, accept

  • choices are given, which is the correct answer among the choices. Correct answer only please.

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