Compute the Pl statistic for Project Q if the appropriate cost of capital is 12 percent....

Question

Question

Compute the Pl statistic for Project Q if the appropriate cost of capital is 12 percent. (Do not round intermediate calculati

Answer 1

Answer #1

PI = Present value of future cash flows / Initial investment

PI = ($3,650/1.12 + $4,480/1.12² + $1,820/1.12³ + $2,450/1.12⁴) / $11,600

PI = 0.83

Answer 2

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