In: Finance
Consider the following projects:
Cash Flows ($) | ||
Project | C0 | C1 |
D | –10,300 | 20,600 |
E | –20,300 | 35,525 |
Assume that the projects are mutually exclusive and that the
opportunity cost of capital is 9%.
a. Calculate the profitability index for each
project. (Do not round intermediate calculations. Round
your answers to 2 decimal places.)
Consider the following projects:
Cash Flows ($) | ||
Project | C0 | C1 |
D | –10,300 | 20,600 |
E | –20,300 | 35,525 |
Assume that the projects are mutually exclusive and that the
opportunity cost of capital is 9%.
a. Calculate the profitability index for each
project. (Do not round intermediate calculations. Round
your answers to 2 decimal places.)
Project | Profitability Index |
D | |
E |
b-1. Calculate the profitability-index using the
incremental cash flows. (Do not round intermediate
calculations. Round your answer to 2 decimal places.)
|