What is profitability Index? Given the discount rates and the
future cash flows of each project, which project should they accept
using Profitability Index?
Cash Flows
Project A
Project B
Project C
Project D
Year Zero
- $ 1,500,000
- $ 1,500,000
- $ 2,000,000
- $ 2,000,000
Year One
$ 350,000
$ 400,000
$ 700,000
$ 200,000
Year Two
$ 350,000
$ 400,000
$ 600,000
$ 400,000
Year Three
$ 350,000
$ 400,000
$ 500,000
$ 600,000
Year Four...