Question: The Black Horse is currently considering a project that will produce cash inflows of RM12,000 a year for three years followed by RM6,500 in year

The Black Horse is currently considering a project that will produce cash inflows of

RM12,000 a year for three years followed by RM6,500 in year 4. The cost of the

project is RM38,000. What is the profitability index if the discount rate is 7 percent?

Should the company accept the project? Why?

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!

Q:

Clarion Manufacturing Company is a publicly held company that is engaged in the manufacture of home and office furniture. The firms most recent income statement and balance sheet are found below. a....

Q:

Assume that you are drafting the Risk Committee Charter for Sea-Shore Hospital. Review the risk committee charters of BNY Mellon, Morgan Stanley, Ullico, Inc., and BlackRock, Inc. (see readings)...

Q:

During the current year, Danny, a calendar-year taxpayer, acquired and placed in service the following business assets: January: Delivery trucks $ 55,000 March: real estate building 150,000 used for...

Q:

The average age for employees at an amusement park is 24 years old with a standard deviation of 2.5 years. Suppose random samples of 40 employees are selected. W'hat would the distribution of average...

Q:

You are considering the following two mutually exclusive projects. Which project should be accepted based on NPV? The Black Horse is currently considering a project that will produce cash inflows of...

Q:

Place your answer in the corresponding green answer cell for each question. The answer cell must contain a formula that references one or more cells in the work box or - no hard-coded numbers in the...

Q:

The Black Horse is currently considering a project that will produce cash inflows of $11,000 a year for three years followed by $6, 500 in Year 4. The cost of the project is $38,000. What is the...

Q:

DE/FALSE. Choose "A" if the statement is true and 'B' if the statement is false. 1Over the period between 1926 to 2014, the average yearly retum on large stocks is higher than that of long term...

Q:

ot ou ingc dhidends grow at a constant rate,the capital gains yield equals which one the following? a. Total yeld b. Current discount rate Market rate of return Dividend yield d. e. Dividend growth...

Q:

Questions 10-11 are based on the following information. Profitability Index The Black Horse is currently considering a project that will produce cash inflows of $11,000 a year for three years...

Q:

the black horse is currently considering a project that will produce cash inflows of 1 2 0 0 0 a year for three consecutive years followed by cashflow of 6 5 0 0 in year 4 . the cost of the project...

Q:

Compute the complex power supplied by the current source in the series RLC circuit in Fig. 11.87. 1, cos at

Q:

Which image represents the path of incident and reflected ray from a convex mirror when an object is placed at infinity? [CBSE Question Bank] (a) Incident ray Reflected ray Object at infinity P F...

Q:

2171. The space capsule has a mass of 2 Mg, center of mass at G , and radii of gyration about its axis of symmetry ( z axis) and its transverse axes ( x or y axis) of kz = 2.75 m and kx = ky = 5.5 m,...

Q:

During the month of November the following transactions occurred. Assignment 1. Record the following transactions in the general journal and post them to the general ledger. 2. Prepare a trial...

Q:

Develop a document flowchart for the following information flow. The individual stores in the Mark Goodwin convenience chain prepare two copies of a goods requisition form (GRF) when they need to...

Q:

The management of Zigby Manufacturing prepared the following estimated balance sheet for March, 2015: To prepare a master budget for April, May, and June of 2015, management gathers the following...

Q:

The condensed product- line income statement for Dish N Dat Company for the month of March is as follows: Fixed costs are 15% of the cost of goods sold and 40% of the selling and administrative...

Q:

Tyrene Products manufactures recreational equipment. One of the companys products, a skateboard, sells for $37.50. The skateboards are manufactured in an antiquated plant that relies heavily on...

Q:

Determine if the overhead allocated to the product relates to a single plantwide overhead rate method, multiple production department factory overhead rate method, or activity-based costing...

Q:

Given a population in which and a random sample from this population of size 100, find: (a) P(p = .65) (c) P(.56.63) (b) P(p .58)

Q:

According to the 2000 U.S. Census Bureau (A-8), in 2000, 9.5 percent of children in the state of Ohio were not covered by private or government health insurance. In the neighboring state of...

Q:

____________________ power should be used by a project manager when she is asking her team members to perform a task within their job description.