Compute the Pl statistic for Project X and note whether the firm should accept or reject the project with the cash flows showe below if the appropriate cost of capital is 6 percent. Time: Cash flow: 0 -79 1 -79 2 ON 3 104 4 79 5 54

Corporate Fin Focused Approach
5th Edition
ISBN:9781285660516
Author:EHRHARDT
Publisher:EHRHARDT
Chapter10: The Basics Of Capital Budgeting: Evaluating Cash Flows
Section10.6: Profitability Index (pi)
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Compute the Pl statistic for Project X and note whether the firm should accept or reject the project with the cash flows shown
below if the appropriate cost of capital is 6 percent.
Time:
Cash flow:
0
-79
1
-79
2
0
3
104
4
79
V
5
54
Transcribed Image Text:Compute the Pl statistic for Project X and note whether the firm should accept or reject the project with the cash flows shown below if the appropriate cost of capital is 6 percent. Time: Cash flow: 0 -79 1 -79 2 0 3 104 4 79 V 5 54
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