Question

Calculate the Profitability Index for a project with the following potential cash flows. Assume a discount rate (risk-ad...

Calculate the Profitability Index for a project with the following potential cash flows.

Assume a discount rate (risk-adjusted WACC) of 5.9%.

Year Cash Flow  
0 -17,580
1 4,970
2 6,163
3 4,904
4 2,973
5 5,552

Enter your answer as a number with 2 places of decimal precision (i.e. 1.23)

Do not enter the dollar sign or commas.

Do not round intermediate calculations (PVs or NPV)

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Answer #1

A Year B Cash Flow 0 -17,580 1 4,970 Homo 6,163 4,904 2,973 5,552 9 WACC 10 Profitability Index 11 5.90% 1.19A Year Cash Flow 42 5 3 64 75 - 17580 4970 6163 4904 2973 5552 0.059 =NPV(B9,B3:B7)/-B2 9 WACC 10 Profitability Index 11 12 1

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