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Dax Systems is considering a project that has the following cash flows for Project X and...

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Finance

Dax Systems is considering a project that has the following cashflows for Project X and Y. What is the PI of X, using the newmethod? Cost of Capital = 10% Year Project X Project Y 0 -$1,000-$2,000 1 $500 $1,400 2 $500 $800 3 $500 $400 0.243 0.201 0.5450.920 0.117

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3.8 Ratings (493 Votes)

Statement showing Cash flows
Particulars Time PVf 10% Amount PV
Cash Outflows                            -                          1.00             (1,000.00)             (1,000.00)
PV of Cash outflows = PVCO             (1,000.00)
Cash inflows                        1.00                   0.9091                   500.00                   454.55
Cash inflows                        2.00                   0.8264                   500.00                   413.22
Cash inflows                        3.00                   0.7513                   500.00                   375.66
PV of Cash Inflows =PVCI               1,243.43
PI = PVCI/PVCO                        1.24

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