Question
In: Finance
Compute the PI statistic for Project Z if the appropriate cost of capital is 6 percent....
Compute the PI statistic for Project Z if the appropriate cost of capital is 6 percent. (Do not round intermediate calculations and round your final answer to 2 decimal places.)
| Project Z | ||||||
| Time: | 0 | 1 | 2 | 3 | 4 | 5 |
| Cash flow | –$3,300 | $730 | $860 | $1,030 | $680 | $480 |
Solutions
Expert Solution
| rate | 6.0000% | |
| Cash flows | Year | Discounted CF= cash flows/(1+rate)^year |
| (3,300.00) | 0 | (3,300.00) |
| 730.00 | 1 | 688.68 |
| 860.00 | 2 | 765.40 |
| 1,030.00 | 3 | 864.81 |
| 680.00 | 4 | 538.62 |
| 480.00 | 5 | 358.68 |
NPV = -83.81
PI = 1 - 83.81/3300 = 0.97
jeff jeffy answered 1 year agoRelated Solutions
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show how to do this in excel and the excel formulas
You have to show what the excel formulas are pls
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