Suppose you are considering a project that will have an initial construction cost today and a final cleanup cost at the end of the project's lifetime. The initial cost is $64,000 today, followed by expected annual inflows of $12,000 for the next 9 years, followed by a final outflow of $39,000 one year after the last inflow. If your cost of capital is 5.8%, what is this project's profitability index? a. 1.17 b. 0.75 O c. 0.55 o d. 1.60 O e. 1.10 O f. 0.63 O g. 1.32 O h. 0.96

Suppose you are considering a project that will have an initial construction cost today and a final cleanup cost at the end of the project's lifetime. The initial cost is $64,000 today, followed by expected annual inflows of $12,000 for the next 9 years, followed by a final outflow of $39,000 one year after the last inflow. If your cost of capital is 5.8%, what is this project's profitability index? a. 1.17 b. 0.75 O c. 0.55 o d. 1.60 O e. 1.10 O f. 0.63 O g. 1.32 O h. 0.96

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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