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Consider the following cash flows:

This question was answered on Jan 10, 2013. View the Answer
Consider the following cash flows:


Year Cash Flow
0 –$28,000
1 15,700
2 13,200
4 9,600
What is the profitability index for the above set of cash flows if the relevant discount rate is 10 percent?
What is the profitability index if the discount rate is 15 percent?
What is the profitability index if the discount rate is 22 percent?
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8419055.xlsx

YEAR
0
1
2
3 Cash Flows DCF @ 10%
DCF @ 15%
DCF @ 22%
$(28,000)
$(28,000)
$(28,000)
$(28,000)
$15,700
$14,273
$13,652
$12,869
$13,200
$10,909
$9,981
$8,869
$9,600
$7,213
$6,312
$5,287
$32,394...

This question was asked on Jan 10, 2013 and answered on Jan 10, 2013.

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