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QUESTION 9 Time Investment B-$1 million $550,000 $400,000 $325,000 The timeline of an investment is shown above. If the cost of capital is 8%, what is the profitability index of this investment? 0.110 O 0.121 0.275 o 0,441 QUESTION 10 What is the payback period of the investment shown in question 97 O 1 years 02years O3 yoars O 4 years
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9 Profitability index PV of future cash flows/Initial investment 4 Period Cash flow PV 0 -1000000 -1000000 -1000000 1 550000 509259.3 -450000 2 400000 342935.5 -50000 3 325000 257995.5 275000 Cumulative cash flows 110190.3 0.110 12 13 10 Payback period 2.15 years 3 years 17 18 19 20Profitability index 4 Cash flow -1000000 550000 Period PV Cumulative cash flov 1 2 325000 10 -SUM(D6:D9) -D10/-C6 12 13 15 10 Payback period years years 16 |

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