Company X is currently considering a project that will produce cash inflows of $9,000 a year...
Company X is currently considering a project that will produce cash inflows of $9,000 a year for two years followed by $6,500 a year for three more years. The cost of the project is $25,000. What is the profitability index if the discount rate is 8 percent? Possible Answers:
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1.22 |
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1.30 |
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1.47 |
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1.53 |
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1.60 |
Homework Answers
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Company X is currently considering a project that will produce
cash inflows of $9,000 a year...
Irwin Industries is currently considering a project that will produce cash inflows of $8,000 a year...
Irwin Industries is currently considering a project that will produce cash inflows of $8,000 a year for two years followed by $6,500 a year for three more years. The cost of the project is $26,000. What is the profitability index if the discount rate is 8%?
The Black Horse is currently considering a project that will produce cash inflows of $11,000 a...
The Black Horse is currently considering a project that will produce cash inflows of $11,000 a year for three years followed by $6,500 in Year 4. The cost of the project is $38,000. What is the profitability index if the discount rate is 9 percent? A. .85 B. .93 C. 1.04 D. 1.09 E. 1.12
Global Investments is considering a project that will produce cash inflows of $11,000 in year 1,...
Global Investments is considering a project that will produce cash inflows of $11,000 in year 1, $24,000 in year 2, and $36,000 in year 3. What is the present value of these cash inflows if the company assigns the project a discount rate of 12 percent?
Homer is considering a project with cash inflows of $950 in year 1, $900 in year...
Homer is considering a project with cash inflows of $950 in year 1, $900 in year 2, $1,000 in year 3 respectively. The project has a required discount rate of 11 percent and an initial cost of $2,100. What is the discounted payback period? A. 0-1 years B. 1-2 years C. 2-3 years D. more than 3 years
Nelson’s Industrial Supply is considering a project that has projected cash inflows of $8,400 a year...
Nelson’s Industrial Supply is considering a project that has projected cash inflows of $8,400 a year for 3 years. The initial cost of the project is $21,000 and the required return is 10.75 percent. Should this project be accepted based on the profitability index criterion? Why or why not? multiple choice: Multiple Choice no; because the PI is 1.54 yes; because the PI is 1.54 yes; because the PI is .98 no; because the PI is .98
What is the present value of the cash inflows if a project uses a 12 discount...
What is the present value of the cash inflows if a project uses a 12 discount rate. The initial investment will be $12,950 and produce $3,000 in annual cash inflows. The estimated life of the project is ten years. Also, calculate the profitability index.
1. A proposed project has an initial cost of $69,500 and is expected to produce cash...
1. A proposed project has an initial cost of $69,500 and is expected to produce cash inflows of $32,200, $50,500, and $43,000 over the next 3 years, respectively. What is the net present value of this project at a discount rate of 15.8 percent? $23,657.30 $21,763.60 $24,050.28 $24,933.59 2. A project has an initial cost of $19,000 and cash inflows of $4,200, $4,600, $11,600, and $5,750 over the next 4 years, respectively. What is the payback period? 4.22 years 2.88...
QUESTION 1 Star Industries is considering three alternative projects for the company's investment. The cash flows for three independent projects are as follows: Year 1 Project A ($50,000) $10,...
QUESTION 1 Star Industries is considering three alternative projects for the company's investment. The cash flows for three independent projects are as follows: Year 1 Project A ($50,000) $10,000 $15,000 $20,000 $25,000 $30,000 Project B ($100,000) $25,000 $25,000 $25,000 $25,000 $25,000 Project C ($450,000) $200,000 $200,000 $200,000 a) If the discount rate for all three projects is 9.5 percent, calculate the profitability index (PI) of these three projects. Which project will be accepted if the projects are mutually exclusive? b)...
A project has expected cash inflows, starting with year 1, of $2,200, $2,900, $3,500 and finally...
A project has expected cash inflows, starting with year 1, of $2,200, $2,900, $3,500 and finally in year four, $4,000. The profitability index is 1.14 and the discount rate is 12 percent. What is the initial cost of the project?
•A project has an initial cost of $18,000 and is expected to produce cash inflows of...
•A project has an initial cost of $18,000 and is expected to produce cash inflows of $7,000, $9,000, and $7,500 over the next three years, respectively. What is the discounted payback period if the required rate of return is 12 percent?
What is the present value of the cash inflows if a project uses a 12 discount rate. The initial investment will be $12,950 and produce $3,000 in annual cash inflows. The estimated life of the project is ten years. Also, calculate the profitability index.
QUESTION 1 Star Industries is considering three alternative projects for the company's investment. The cash flows for three independent projects are as follows: Year 1 Project A ($50,000) $10,000 $15,000 $20,000 $25,000 $30,000 Project B ($100,000) $25,000 $25,000 $25,000 $25,000 $25,000 Project C ($450,000) $200,000 $200,000 $200,000 a) If the discount rate for all three projects is 9.5 percent, calculate the profitability index (PI) of these three projects. Which project will be accepted if the projects are mutually exclusive? b)...
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