What is the profitability index of a project that costs $8,000 and provides cash flows of $2,400 in years 1 and 2 and $4,400 in year and 4? The discount rate is 10%. (Do not round intermediate calculations. Round your answer to 4 decimal places.) Profitability index

Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 16EB: Project Y cost $8,000 and will generate net cash inflows of $1,500 in year one, $2,000 in year two,...
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What is the profitability index of a project that costs $8,000 and provides cash flows of $2,400 in years 1 and 2 and $4,400 in years 3
and 4? The discount rate is 10%. (Do not round intermediate calculations. Round your answer to 4 decimal places.)
Profitability index
Transcribed Image Text:What is the profitability index of a project that costs $8,000 and provides cash flows of $2,400 in years 1 and 2 and $4,400 in years 3 and 4? The discount rate is 10%. (Do not round intermediate calculations. Round your answer to 4 decimal places.) Profitability index
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