ZuoTi.Pro
Question

Consider the following projects: Project COC A -$2,350 +$2,250 B - 2,350 + 1,690 C2 +$ 1,450 + 1,778 a. Calculate the profita

business   finance   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1
Profitability Index = Present value of cash inflows/Initial Investment
Project A
Year Cash Flows PVF PV
1 2250 0.819672131 1844.262295
2 1450 0.671862403 974.2004837
PV of cash inflows 2818.462779
PI 1.199345863
Project B
Year Cash Flows PVF PV
1 1690 0.819672131 1385.245902
2 1778 0.671862403 1194.571352
PV of cash inflows 2579.817253
PI 1.097794576
Both should be selected as PI is greater than 1 for both
0 0
Add a comment
Know the answer?
Add Answer to:
Consider the following projects: Project COC A -$2,350 +$2,250 B - 2,350 + 1,690 C2 +$...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • Consider the following projects: с C2 Project A B Co -$2,350 - 2,350 +$2,250 + 1,690...

    Consider the following projects: с C2 Project A B Co -$2,350 - 2,350 +$2,250 + 1,690 +$1,450 + 1,778 a. Calculate the profitability index for A and B assuming a 22% opportunity cost of capital. (Do not round intermediate calculations. Round your answers to 4 decimal places.) Project Profitability index А B b. According to the profitability index rule, which project(s) should you accept? O Project A O Project B Both O Neither

  • Project C0 C1 C2 A − $ 2,950 + $ 2,850 + $ 2,050 B −...

    Project C0 C1 C2 A − $ 2,950 + $ 2,850 + $ 2,050 B − 2,950 + 2,290 + 1,898 a. Calculate the profitability index for A and B assuming a 23% opportunity cost of capital. (Do not round intermediate calculations. Round your answers to 4 decimal places.) b. According to the profitability index rule, which project(s) should you accept? Project A Project B Both Neither

  • Consider the following projects: Cash Flows ($) Project C0 C1 D –11,200 22,400 E –21,200 37,100...

    Consider the following projects: Cash Flows ($) Project C0 C1 D –11,200 22,400 E –21,200 37,100 Assume that the projects are mutually exclusive and that the opportunity cost of capital is 12%. a. Calculate the profitability index for each project. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Project Profitability Index D E b-1. Calculate the profitability-index using the incremental cash flows. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Profitability-index            ...

  • Books .l LTE 11:05 AM @ 43%O Consider the following projects: Cash Flows (S) Project CO...

    Books .l LTE 11:05 AM @ 43%O Consider the following projects: Cash Flows (S) Project CO CID-10,500 21,000 E-20,500 35,875 Assume that the projects are mutually exclusive and that the opportunity cost of capital is 10%. a. Calculate the profitability index for each project. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Project Profitability Index DE b-1. Calculate the profitability-index using the incremental cash flows. (Do not round intermediate calculations. Round your answer to 2 decimal...

  • Consider the following projects: Cash Flows (S) -10,600 -20,600 C1 21,200 36,050 Assume that the projects...

    Consider the following projects: Cash Flows (S) -10,600 -20,600 C1 21,200 36,050 Assume that the projects are mutually exclusive and that the opportunity cost of capital is 11%. a. Calculate the profitability index for each project. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Project Profitability Index b-1. Calculate the profitability-index using the incremental cash flows. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Profitabillty-Index b-2. Which project should you choose? Project...

  • Consider the following projects Cash Flows () Co -11,700 -21,700 roject 23,400 37,975 Assume that the...

    Consider the following projects Cash Flows () Co -11,700 -21,700 roject 23,400 37,975 Assume that the projects are mutually exclusive and that the opportunity cost of capital is 12%. a. Calculate the profitability index for each project. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Project Profitability Index 90 b-1. Calculate the profitabilty-index using the incremental cash flows. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Profitability-index b-2. Which project should you...

  • 1. You have the chance to participate in a project that produces the following cash flows:...

    1. You have the chance to participate in a project that produces the following cash flows: Cash Flows ($) C0 C1 C2 4,600 4,400 –10,800 a. The internal rate of return is 12.69%. If the opportunity cost of capital is 12%, what is the NPV of the project? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to 2 decimal places.) NPV            $ __________. 2. Consider the following projects: Cash Flows...

  • The following are the cash flows of two projects: Year Project A Project B 0 −$...

    The following are the cash flows of two projects: Year Project A Project B 0 −$ 220 −$ 220 1 100 120 2 100 120 3 100 120 4 100 If the opportunity cost of capital is 10%, what is the profitability index for each project? (Do not round intermediate calculations. Round your answers to 4 decimal places.)

  • 3. 10.00 points Consider the following projects: Cash Flows (S) -10,500 -20,500 21,000 35,875 Assume that...

    3. 10.00 points Consider the following projects: Cash Flows (S) -10,500 -20,500 21,000 35,875 Assume that the projects are mutually exclusive and that the opportunity cost of capital is 10%. a. Calculate the protitability index for each project. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Project Profitability Index b-1. Calculate the protitablity-index using the incremental cash flows. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Prontability-Index b-2. Which project should you...

  • The following are the cash flows of two projects: Year Project A $ (200) 80 80...

    The following are the cash flows of two projects: Year Project A $ (200) 80 80 80 Project B $ (200) 100 100 100 AWN If the opportunity cost of capital is 11%, what is the profitability index for each project? (Do not round intermediate calculations. Round your answers to 4 decimal places.) Answer is complete but not entirely correct. Project Profitability Index 1.2410 % 1.2218 B

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT