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Year Cash Flow 0 ?$8,600 1 4,400 2 4,700 3 4,000 a. What is the profitability...

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Finance

Year Cash Flow 0 ?$8,600 1 4,400 2 4,700 3 4,000

a. What is the profitability index for the cash flows if therelevant discount rate is 7 percent?

b. What is the profitability index for the cash flows if therelevant discount rate is 15 percent?

c. What is the profitability index for the cash flows if therelevant discount rate is 22 percent?

Answer & Explanation Solved by verified expert
3.7 Ratings (588 Votes)
Ans a 134 Year Project i DF 7 ii PV of Project A i ii 1 4400 0935 411215 2 4700 0873 410516 3 4000 0816 326519 NPV 1148250 Total of PV of Cash Inflows 1148250    See Answer
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Year Cash Flow 0 ?$8,600 1 4,400 2 4,700 3 4,000a. What is the profitability index for the cash flows if therelevant discount rate is 7 percent?b. What is the profitability index for the cash flows if therelevant discount rate is 15 percent?c. What is the profitability index for the cash flows if therelevant discount rate is 22 percent?

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