A firm evaluates a project with the following cash flows. The firm has a 2 year payback period criteria and a required return of 17 percent. Year Cash flow (OMR) year 0= -39,000 year 1= 28,000 year 2= 19,000 year 3= 14,000 year 4= -12,000 year 5= 10,000 What is the profitability index for the project?

A firm evaluates a project with the following cash flows. The firm has a 2 year payback period criteria and a required return of 17 percent. Year Cash flow (OMR) year 0= -39,000 year 1= 28,000 year 2= 19,000 year 3= 14,000 year 4= -12,000 year 5= 10,000 What is the profitability index for the project?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter11: Capital Budgeting And Risk

Section: Chapter Questions

Problem 14P

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