Consider the following two independent investment opportunities that are available to Lion, Inc. The appropriate discount rate is 11.7%.Project X Project YYear0123$-1,272544941860$-2.1629092,1941,302What is the Profitability Index of project Y? (Round answer to 2 decimal places. Do not round intermediate calculations)

Here, YearProject Y Cash Flows0 $ (2,162.00)1 $ 909.002 $…

Consider the following two independent investment opportunities that are available to Lion, Inc. The appropriate discount rate is 11.7% Project X Project Y Year 0 1 2 $-1.272 544 941 860 $-2.162 909 2.194 1,302 What is the Profitability Index of project Y? (Round answer to 2 decimal places. Do not round intermediate calculations)

Consider the following two independent investment opportunities that are available to Lion, Inc. The appropriate discount rate is 11.7% Project X Project Y Year 0 1 2 $-1.272 544 941 860 $-2.162 909 2.194 1,302 What is the Profitability Index of project Y? (Round answer to 2 decimal places. Do not round intermediate calculations)

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Suppose the following two independent investment opportunities are available to a company. The appropriate discount rate is 8 percent. Year O 1 2 3 Project Alpha -$4,500 b. 2,300 2,200 1,450 a. Compute the profitability index for each of the two projects. (Do not round intermediate calculations and round your answers to 3 decimal places, e.g., 32.161.) Project Alpha Project Beta Project Beta -$ 6,100 1,350 4,500 4,000 Profitability Index Which project(s), if either, should the company accept based on the profitability index rule? Project Alpha O Project Beta Neither project O Both projects
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