What is the profitability index for the following set cash flows if the relevant discount rate is

Question:

What is the profitability index for the following set cash flows if the relevant discount rate is 10 percent? What if the discount rate is 15 percent? If it is 22 percent?

Year Cash flow

0 ....................... -$20,000

1 .......................... 13,000

2 ............................ 8,500

3 ............................ 5,500

Discount Rate
Depending upon the context, the discount rate has two different definitions and usages. First, the discount rate refers to the interest rate charged to the commercial banks and other financial institutions for the loans they take from the Federal...