Salalah Wind Energy has taken up a new project withan initial investment of 50000 OMR.The expectedfuture cashflow from the project over the next threeyears will be 22500 OMR, 23500 OMR and 24500OMR.What is the profitability index if the discount rateis 7 percent?Select one:O a. 1.48O b. 1.23O c. 1.44O d. 1.63O e. None of these

The profitability index can be calculated as follows :

Answered: ah Wind Energy has ta itial investment…

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ah Wind Energy has ta itial investment of 50 e cashflow from the p

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 19EA: Redbird Company is considering a project with an initial investment of $265,000 in new equipment...

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Concept explainers

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.

Question

Salalah Wind Energy has taken up a new project with
an initial investment of 50000 OMR.The expected
future cashflow from the project over the next three
years will be 22500 OMR, 23500 OMR and 24500
OMR.What is the profitability index if the discount rate
is 7 percent?
Select one:
O a. 1.48
O b. 1.23
O c. 1.44
O d. 1.63
O e. None of these

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