A project will produce cash inflows of $3,100 a year for 3 years. The project's initial...

A project will produce cash inflows of $3,100 a year for 3 years. The project's initial cost is $10,400. What is the profitability index value if the required rate of return is 16 percent?

Group of answer choices

0.90

0.33

1.09

0.67

-0.88

Expert Solution

Solution :

The profitability index value if the required rate of return is 16 percent = 0.67

The solution is option 4 = 0.67

Please find the attached screenshot of the excel sheet containing the detailed calculation for the solution.

jeff jeffy answered 1 year ago

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