Determine the profitability index for this project

Assignment Help Finance Basics
Reference no: EM13279172

An investment project requires a net investment of $100,000 and is expected to generate annual net cash inflows of $25,000 for 6 years. The firm's cost of capital is 12 percent. Determine the profitability index for this project.

Reference no: EM13279172

Questions Cloud

Calculate the cash inflows from the sale of the old machine : Calculate the incremental depreciation on the new versus the old machine. d) Determine the net present value of the new machine. Should they purchase the new machine?
Design an input and output circuit state machine circuit : Design an input and output circuit state m/c Circuit normally produces an output = 1. It continues to produce output = 1 as long as the following is true: This circuit accepts "at most" one set of sequence "10101" and one set of sequence "01010".
Current challenges-poverty-conflict-debt : How much should Sub-Saharan Africa%u2019s current challenges (poverty, conflict, debt, etc.) be attributed to factors such as European colonization or outside forces such as globalization %u2026or how much are they now the responsibility of Africans?
Find the charge before and after the mylar is withdrawn : Two 7.0mm×7.0mm electrodes with a0.10-mm-thick sheet of Mylar between them are attached to a 9.0V battery. find the charge before and after the Mylar is withdrawn
Determine the profitability index for this project : An investment project requires a net investment of $100,000 and is expected to generate annual net cash inflows of $25,000 for 6 years. The firm's cost of capital is 12 percent. Determine the profitability index for this project.
Determine the net present value of the project : A project requires a net investment of $450,000. It has a profitability index of 1.25 based on the firm's 12 percent cost of capital. Determine the net present value of the project.
Define what is the first order rate constant : The initial rate of a reaction which is first order in A is 2.0 x 10^-6 M/s when the initial concentration is 0.0050 M. What is the first order rate constant
Find the maximum separation distance of the two particles : A neutron turns into a proton and an electron. The electron goes in one direction and the proton goes in the opposite direction. find the maximum separation distance of the two particles
At what cost of capital will the net present value : At what cost of capital will the net present value of the two projects be the same? (That is, what is the "crossover" rate?)

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

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