The Sisyphean Company is planning on investing in a new project. This will involve the purchase of some new machinery costing $450,000. The Sisyphean Company expects cash inflows from this project as detailed below: The appropriate discount rate for this project is 10%. The profitability index for this project is closest to: Year One $200,000 1.44 1.26 0.39 1.58 Year Two $225,000 Year Three $275,000 Year Four $200,000

The Sisyphean Company is planning on investing in a new project. This will involve the purchase of some new machinery costing $450,000. The Sisyphean Company expects cash inflows from this project as detailed below: The appropriate discount rate for this project is 10%. The profitability index for this project is closest to: Year One $200,000 1.44 1.26 0.39 1.58 Year Two $225,000 Year Three $275,000 Year Four $200,000

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter10: Capital Budgeting: Decision Criteria And Real Option

Section: Chapter Questions

Problem 12P

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