Donald has the possibility to invest in project BIDON. The corporate tax rate is 20%. The...

 

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Donald has the possibility to invest in project BIDON. The corporate tax rate is 20%. The expected cash flows in euros before tax are presented in the table below. Ignore inflation. The investment of € 600 is depreciated in 2 years on a straight line (linear) basis to 0. The discount rate is 5%. Donald does not have any debt outstanding. Table: Expected cash flows before tax of project BIDON. CFt CFo CF₁ CF₂ Amount in euros -600 300 600 Question: Calculate the profitability index (PI) of this project. Round your answer to 1 decimal. Donald has the possibility to invest in project BIDON. The corporate tax rate is 20%. The expected cash flows in euros before tax are presented in the table below. Ignore inflation. The investment of € 600 is depreciated in 2 years on a straight line (linear) basis to 0. The discount rate is 5%. Donald does not have any debt outstanding. Table: Expected cash flows before tax of project BIDON. CFt CFo CF₁ CF₂ Amount in euros -600 300 600 Question: Calculate the profitability index (PI) of this project. Round your answer to 1 decimal.

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Heres how to calculate the profitability index PI of project BIDON 1 Consider the tax impact Since t... View the full answer