H what does the profitability index pi measure what

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h. What does the profitability index (PI) measure? What are the PI's for Franchises S and L? Mini Case: 10
i. 1. What is the payback period? Find the paybacks for franchises L and S. 50 3 | 80
i. 2. What is the rationale for the payback method? According to the payback criterion, which franchise or franchises should be accepted if the firm's maximum acceptable payback is 2 years, and if franchises L and S are independent? If they are mutually exclusive?
Mini Case: 10 - 12
franchise S is acceptable, but franchise L is not. Whether the two projects are independent or mutually exclusive makes no difference in this case. i. 3. What is the difference between the regular and discounted payback periods?
i. 4. What is the main disadvantage of discounted payback? Is the payback method of any real usefulness in capital budgeting decisions? ,
Mini Case: 10
j. As a separate project (project P), you are considering sponsoring a pavilion at the upcoming world's fair. The pavilion would cost $800,000, and it is expected to result in $5 million of incremental cash inflows during its 1 year of operation. However, it would then take another year, and $5 million of costs, to

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