A project that requires an initial investment of $850,000 has a profitability index of 1.78. Calculate...
A project that requires an initial investment of $850,000 has a profitability index of 1.78. Calculate the project's net present value (NPV). The required return of the project is 10 percent.
| A. |
$592,500 |
|
| B. |
$772,727 |
|
| C. |
$663,000 |
|
| D. |
$1,513,000 |
Homework Answers
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A project that requires an initial investment of $850,000 has a
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Net present value and Profitability Index of each Project
Following is information on two alternative investments being considered by Tiger Co. The company requires an 8% return from its investments. FV of $1, PVA of SI and FVA of SJ (use appropriate factor(s) from the tables provided.)
49, see
Initial investment
Expected net cash f lows in:
Year I
Year 2
Year 3
Project XI
$ (108, aøe)
39 , aøe
74, see
Project X2
81,øeø
71,øeø
61,øeo
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b. Compute each project's...
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