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Because of concerns about funds being short to finance all

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Pigeon, Inc. is currently considering an eight-year project that has an initial outlay or cost of $80,000. The future cash inflows from its project for years 1 through 8 are the same at $30,000. Pigeon has a discount rate of 13%. Because of concerns about funds being short to finance all good projects, Pigeon wants to compute the profitability index (PI) for each project. What is the PI for Pigeon's current project?

A) About 1.80

B) About 1.60

C) About 1.50

D) About 1.70

Reference no: EM13575924

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