XYZ has the following forecasted income information for a project it is considering. The firm cost of capital is 13%. The project will last for 3 years and cost $30,000.

Earnings before amortization and taxes23,000Amortization10,000Earnings before taxes13,000Taxes3,640Earnings after taxes9,360


Calculate the Profitability index.

Answer rating: 100% (QA)

To calculate the Profitability Index PI you need to divide the pre... View the full answer