A project with an initial cost of $30,700 is expected to provide cash flows of $10,950,...

A project with an initial cost of $30,700 is expected to provide cash flows of $10,950, $11,800, $14,900, and $9,400 over the next four years, respectively. If the required return is 9.2 percent, what is the project's profitability index?

1.392
1.031
1.134
1.237
.808

Expert Solution

Ans 1.237

Year	Project Cash Flows (i)	DF@ 9.2%	DF@ 9.2% (ii)	PV of Project A ( (i) * (ii) )

1	10950	1/((1+9.2%)^1)	0.916	10,027.47
2	11800	1/((1+9.2%)^2)	0.839	9,895.48
3	14900	1/((1+9.2%)^3)	0.768	11,442.43
4	9400	1/((1+9.2%)^4)	0.703	6,610.55
		TOTAL		37,975.93


	PROFITABILITY INDEX =	PRESENT VALUE OF CASH INFLOWS / CASH OUTFLOW
		37975.93 / 30700
		1.237

jeff jeffy answered 10 months ago

a project with an initial cost of $73,600 is expected to generate annual cash flows of...

a project with an initial cost of $73,600 is expected to generate annual cash flows of $16,360 for the next 8 years. what is the projects internal rate of retu

a project with an initial cost of $29,350 is expected to generate cash flows of $7,200,...

a project with an initial cost of $29,350 is expected to generate cash flows of $7,200, $9,300, $9,400, $8,300 and $8,000 over each of the next 5 years respectively. what is the project payback period

A project with an initial cost of $24,800 is expected to generate cash flows of $5,900,...

A project with an initial cost of $24,800 is expected to generate cash flows of $5,900, $8,000, $8,750, $7,650, and $6,700 over each of the next five years, respectively. What is the project's payback period? Multiple Choice 3.28 years 3.39 years 3.49 years 3.75 years 3.65 years

6. A project with an initial cost of $58,050 is expected to generate annual cash flows...

6. A project with an initial cost of $58,050 is expected to generate annual cash flows of $15,480 for the next 7 years. What is the project's internal rate of return? 9. Rossdale Flowers has a new greenhouse project with an initial cost of $365,000 that is expected to generate cash flows of $48,600 for 10 years and a cash flow of $64,000 in Year 11. If the required return is 8.4 percent, what is the project's NPV?

A project has an initial cost of $40,000, expected net cash flows of $9,000 per year...

A project has an initial cost of $40,000, expected net cash flows of $9,000 per year for 7 years, and a cost of capital of 11% Calculate in excel NPV, IRR, PB, DPB?

You are considering a project with an initial cash outlay of $72,000 and expected cash flows...

You are considering a project with an initial cash outlay of $72,000 and expected cash flows of $22,320 at the end of each year for six years. The discount rate for this project is 10.5 percent. a. What are the project's payback and discounted payback periods? b. What is the project's NPV? c. What is the project's PI? d. What is the project's IRR? a. The payback period of the project is nothing years.

You are considering a project with an initial cash outlay of $87000 and expected cash flows...

You are considering a project with an initial cash outlay of $87000 and expected cash flows of $23490 at the end of each year for six years. The discount rate for this project is 10.1 percent. a. What are the project's payback and discounted payback periods? b. What is the project's NPV? c. What is the project's PI? d. What is the project's IRR?

You are evaluating a project with the following cash flows: initial investment is $-23, and the expected...

You are evaluating a project with the following cash flows: initial investment is $-23, and the expected cash flows for years 1 - 3 are $12, $9 and $8 (all cash flows are in millions of dollars). What is this projects NPV? The company's WACC is 9%. Express your answer in millions of dollars, rounded to 2 decimals and without the dollar sign. So, if your answer is 23.5678, just enter 23.57.

You are evaluating a project (initial investment is $41,000) that is expected to produce cash flows...

You are evaluating a project (initial investment is $41,000) that is expected to produce cash flows of $5,000 each year for the next ten years and $7,000 each year for the following ten years. The IRR of this project is 12%. The firm’s WACC is 8%. What is the project’s NPV?

Corporation has a project with the initial cost of $150. It will generate the cash flows...

Corporation has a project with the initial cost of $150. It will generate the cash flows of $50, $100, and $150 in years 1, 2 and 3, respectively, which is the internal rate of return (IRR) of project?

Question