Answer : $ 73000.
>> PV of future cash flows = Initial investment * Profitability index.
>> PV of future cash flows = $ 73000 * 1 = $ 73000.
If a project costing $73000 has a profitability index of 1 and the discount rate was...
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QS 24-10 Profitability index LO P3 Yokam Company is considering two aternative projects. Project requires an initial Investment of $490,000 and has a present value of cash flows of $2.250.000. Project 2 requires an initial Investment of $4 million and has a present value of cash flows of $7 m lon. 1. Compute the profitability Index for each project. Profitability Index Choose Numerator: Choose Profitability Index Profitability index Project Project 2. Based on the profitability Index, which project should the...
What is the profitability index for this proposed project if the required rate of return is 12%? Year om Cash Flows -1,000,000 300,000 500,000 300,000 700,000 4 01.16 1.13 O 1.22 01.25 1.32