Compute the pi statistic for project q

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Compute the PI statistic for Project Q and advise the firm whether to accept or reject the project with the cash flows shown as follows if the appropriate cost of capital is 12 percent.

Project Q

Time 0 1 2 3 4 5

Cash Flow-$1,000 $250 $180 $420 $300 $100

-The project's PI is -11.70 percent and the project should be rejected.

-The project's PI is -8.70 percent and the project should be rejected.

-The project's PI is 3.70 percent and the project should be accepted.

-The project's PI is 5.70 percent and the project should be accepted.

Reference no: EM132795948

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