he following information is available for a potential investment for Panda Company: Initial investment $110000 Net...
he following information is available for a potential investment
for Panda Company:
| Initial investment | $110000 |
| Net annual cash inflow | 20000 |
| Net present value | 44650 |
| Salvage value | 10000 |
| Useful life | 10 yrs. |
The potential investment’s profitability index is
5.50.
3.55.
2.46.
1.41.
Homework Answers
Calculate profitability index :
Profitability index = Present value of cash inflow/Initial investment
= (110000+44650)/110000
Profitability index = 1.41
So answer is d) 1.41
Add Answer to:
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