Question: Consider the following cash flows: Year Cash Flow 0 $-28,400 1 15,300 2 13,600 3 10,000 Requirement 1: What is the profitability index for the

Consider the following cash flows:

Year	Cash Flow
0	$-28,400
1	15,300
2	13,600
3	10,000

Requirement 1:

What is the profitability index for the above set of cash flows if the relevant discount rate is 8 percent? (Do not round intermediate calculations. Round your answer to 3 decimal places (e.g., 32.161).)

Profitability index

Requirement 2:

What is the profitability index if the discount rate is 13 percent? (Do not round intermediate calculations.Round your answer to 3 decimal places (e.g., 32.161).)

Profitability index

Requirement 3:

What is the profitability index if the discount rate is 22 percent? (Do not round intermediate calculations.Round your answer to 3 decimal places (e.g., 32.161).)

Profitability index

References

eBook & Resources

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

Consider the following cash flows: Year Cash flow 0 -$29, 400 1 14, 300 2 14, 600 3 11, 000 Requirement 1: what is the probability index for the above set of cash flows if the relevant discount rate...

Youre trying to determine whether or not to expand your business by building a new manufacturing plant. The plant has an installation cost of $23.4 million, which will be depreciated straight-line to...

Consider the following cash flows: Year Cash Flow 0 $-28,200 1 15,500 2 13,400 3 9,800 Requirement 1: What is the profitability index for the above set of cash flows if the relevant discount rate is...

Consider the following cash flows: Year: Cash Flow 0 : $ 1 4 , 8 0 0 1 : 8 , 4 0 0 2 : 7 , 6 0 0 3 : 4 , 3 0 0 What is the profitability index for the above set of cash flows if the relevant discount...

Consider the following cash flows: Year Cash Flow 0 $28,400 1 15,300 2 13,600 3 10,000 a. What is the profitability index for the cash flows if the relevant discount rate is 8 percent? (Do not round...

Consider the following cash flows: Year Cash Flow 0 $ 28,300 1 15,400 2 13,500 3 9,900 What is the profitability index for the cash flows if the relevant discount rate is 9 percent? (Do not round...

Consider the following cash flows: Year Cash Flow 0 $ 28,600 1 15,100 2 13,800 3 10,200 What is the profitability index for the cash flows if the relevant discount rate is 11 percent? (Do not round...

Consider the following cash flows: Year Cash Flow 0 $-28,100 1 15,600 2 13,300 3 9,700 What is the profitability index for the above set of cash flows if the relevant discount rate is 11 percent?...

Consider the following cash flows: Year Cash Flow 0 $ 2 8 , 5 0 0 1 1 5 , 2 0 0 2 1 3 , 7 0 0 3 1 0 , 1 0 0 What is the profitability index for the cash flows if the relevant discount rate is 1 0...

Consider the following cash flows: Year Cash Flow 0 $29,700 1 14,000 2 14,900 3 11,300 a. What is the profitability index for the cash flows if the relevant discount rate is 12 percent? (Do not round...

The Digital Arts Company manufactures color laser printers. Model A200 presently sells for $300 and has a total product cost of $240, as follows: Direct materials ........ $170 Direct labor...

Details regarding a person who is employed in a Company & also does his own part time business are given as follows: Business Income as per Income Statement prepared Rs 6,000,000 by him Business...

This chapter lists seven types of documentary source. What are they?

The first scenario will be a Verbal Judo scenario in which your scenario follows the standard Verbal Judo interaction: You need to ask somebody to modify their behavior either to do something or to...

Draft a proposal for a risk assessment exercise.

Understand the business case for equal opportunities and be able to identify how it applies in differing organisations.

Assess the implications of putting a policy into practice and evaluating the success of initiatives in this area.