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The company has a project with a 5-year life, an initial investment of $195,000, and is...

The company has a project with a 5-year life, an initial investment of $195,000, and is expected to yield annual cash flows of $56,000. Whathat is the present value index of the project if the required rate of return is set at 10%?

Present value index = Total present value of net cash flows
Initial investment
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Answer #1
Present value index
Total pV of net cash flows/Initial investment
(56000*3.79079)/195000 1.09
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