The management of Leitheiser Corporation is considering a project that would require an initial investment of...
The management of Leitheiser Corporation is considering a project that would require an initial investment of $41,000. No other cash outflows would be required. The present value of the cash inflows would be $52,580. The profitability index of the project is closest to (Ignore income taxes.):
Multiple Choice
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0.72
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1.28
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0.28
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0.22
Homework Answers
Project profitability index
= Net present value /investment required
= (52,580-41,000)/41,000
= 0.28
Option C is the answer
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