Describe the investment profitability index

Assignment Help Finance Basics
Reference no: EM131931659

Question: ABC Inc. is considering an investment of $1,022 million with after-tax cash inflows of $287 million per year for six years and an additional after-tax salvage value of 13 million in Year 6. The required rate of return is 8%. What is the investment's Profitability Index (PI)?

Reference no: EM131931659

Questions Cloud

How much would need to raise in given problem : ABC purchases $454,000 worth of goods from its supplier each year on terms of 1/10, net 30 and currently does not take the discount.
Build journal entries to record the issuance of the bonds : Build journal entries to record the issuance of the bonds and the interest payments for 2016 and 2017 using the straight-line method.
Organizing effects and activating effects : What is the difference of organizing effects and activating effects? List some examples of both effects on males and females.
Identify fusion marketings digital applications : BSBMGT407 - Apply Digital Solutions to Work Processes - Identify Fusion Marketings digital applications and Locate and use digital information on intellectual
Describe the investment profitability index : ABC Inc. is considering an investment of $1,022 million with after-tax cash inflows of $287 million per year for six years and an additional after-tax salvage.
Discuss androgen and estrogen : Describe the role of the SRY gene in mammalian sexual development, be sure to discuss androgen and estrogen.
Why can customer feedback be considered a type of market : Why can customer feedback be considered a type of market research? Is this market research more or less valuable than research you conduct?
Evaluate the annualized cost of trade credit : ABC extends credit to its customers on terms of 2/10, net 40. Assuming a customer pays the invoice at the end of the costly trade credit period.
Phenomenology of intimacy : "The Phenomenology of Intimacy" in the Study Guide, and then answer the following questions:

Reviews

Write a Review

Finance Basics Questions & Answers

  What are the pre-tax profits from sales of course packs

Southwest U's campus book store sells course packs for $15 each, the variable cost per pack is $9, fixed costs to produce the packs are $200,000, and expected annual sales are 50,000 packs. What are the pre-tax profits from sales of course packs?

  What rate of return does the investor expect to receive

The projected growth at a rate of dividends for this stock is 5.66 percent per year. What rate of return does the investor expect to receive on this stock if he or she purchases the stock today?

  Computation of eps

Computation of EPS and I want to compute the degree if operating leverage and financial leverage and the combined leverage

  The bonus is paid immediately and the salary is paid in

youve just joined the financial consulting firm of mara kelya and shawn. theyve offered you two different salary

  The botolph corporation produces botolph inators

The Botolph Corporation produces botolphinators

  Best describes the firm''s degree of operating leverage?

best describes the firm's degree of operating leverage?

  Why have the latter proven so popular with investors

What is a Eurobond? Why did these bonds come into existence? Why do Eurobond investors like the fact that these are typically "bearer bonds"? What risk does an investor run from holding bearer bonds rather than registered bonds?

  Estimate the mean income for the first year

An economist wants to estimate the mean income for the first year of work for college graduates.

  Assume the following free cash flows for zhang inc for 2011

1. Assume the following free cash flows for Zhang Inc. for 2011 and forecasted FCFF for 2012 onward (in mllions):  Current Forecast Horizon Terminal Year ($millions)   2011 2012 2013 2014 2015 Free cash flows to the firm (FCFF) $5,138 $5,396 $5,794 $..

  What is the firms avg collection period

suppose that the firm's cost of carrying receivables was 8% annually. how much would the toughened credit policy save the firm in annual receivables carrying expense?(assume that the entire amount of receivables had to be financed)

  For each of the following items indicate whether the item

for each of the following items indicate whether the item should be reflected in the 2011 financial statements for

  Compute the variance of portfolio returns

Hyacinth Macaw invests 60% of her funds in stock I and the balance in stock J. The standard deviation of returns on I is 10 percent, and on J it is 20 percent.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd