Question

si vous ne postany de la 5. What is the profitability index for an investment with the following cash flows given a 14.5 percent required return? Year wNeo Cash Flow -$46,500 $12,200 $38,400 $11,300 A. 0.94 B. 0.98 C. 1.02 D. 1.06 E. 1.11

Answer 1

5.

profitability index

=(12200/(1+14.5%)^1+38400/(1+14.5%)^2+11300/(1+14.5%)^3)/46500

=1.02

6.

cash flow paid back in 3 years

=1100+1640+3800

=6540

payback period will be

=3+(7500-6540)/4500

=3.21 years

the above is answer..