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A company plans to expand operations by building a new factory in Hudson Ohio. The...

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A company plans to expand operations by building a new factory in Hudson Ohio. The factory requires an initial outlay of $75,000,000 and is expected to generate the following net cash flows over the next 10 years. The project has an expected terminal value of $10,000,000 (included in $35,000,000 CF10 below) The company uses a required rate of return for this project of 10% Note: period 10 includes scrap/terminal value 1 2. 3 4 5 6 7 8 9 10 (18,000,000) 23,000,000 32,000,000 46,000,000 46,000,000 46,000,000 35,000,0 32,000,000 28,000,000 35,000,000 8 What is the profitability index a. 3.250 b. 2.279 c. 1.750 d 1.250 9 if two projects have a correlation coefficient of negative.85 (-.85), we could describe these two projects as a. having a moderate positive correlation bhaving no observable correlation c slightly negatively correlated d highly negatively correlated

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