You are asked to evaluate a new tractor project for Deere. The engineers and marketing and accounting folks have pooled their efforts to generate the following expectations about the project's cash flows (FCFF): CF 0 = - 109.4, CF1 = 20, CF2 =,55, CF3 = 60, CF4 = 60, CF4 = 25, CF5 = 10. If the WACC is 10%, what will be the profitability index for this project? (write this number as a decimal and not as a percentage, e.g. 0.11 not 11 %. Round your answer to three decimal places. For example 1.23450 or 1.23463 will be rounded to 1.235 while 1.23448 will be rounded to 1.234)
You are asked to evaluate a new tractor project for Deere. The engineers and marketing and accounting folks have pooled their efforts to generate the following expectations about the project's cash flows (FCFF): CF 0 = - 109.4, CF1 = 20, CF2 =,55, CF3 = 60, CF4 = 60, CF4 = 25, CF5 = 10. If the WACC is 10%, what will be the profitability index for this project? (write this number as a decimal and not as a percentage, e.g. 0.11 not 11 %. Round your answer to three decimal places. For example 1.23450 or 1.23463 will be rounded to 1.235 while 1.23448 will be rounded to 1.234)
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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Transcribed Image Text:You are asked to evaluate a new tractor project for Deere. The engineers
and marketing and accounting folks have pooled their efforts to generate
the following expectations about the project's cash flows (FCFF): CF
0 = - 109.4, CF1 = 20, CF2 =,55, CF3 = 60, CF4
=
60, CF4 = 25, CF5 = 10. If
the WACC is 10%, what will be the profitability index for this project? (write
this number as a decimal and not as a percentage, e.g. 0.11 not 11 %.
Round your answer to three decimal places. For example 1.23450 or
1.23463 will be rounded to 1.235 while 1.23448 will be rounded to 1.234)
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