Question: InnerC, Inc. is currently considering an five-year project that has an initial outlay or cost of $60,000. The future cash inflows from its project for

InnerC, Inc. is currently considering an five-year project that has an initial outlay or cost of $60,000. The future cash inflows from its project for years 1 through 5 are the same at $20,000. InnerC has a discount rate of 15%. Because of concerns about funds being short to finance all good projects, InnerC wants to compute the profitability index (PI) for each project. What is the PI for InnerC's current project?

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!