Should project accept based on profitability index criterion

Reference no: EM132012681

Question: Nelson's Industrial Supply is considering a project that has projected cash inflows of $6,000 a year for 4 years. The initial cost of the project is $16,800 and the required return is 12.75 percent. Should this project be accepted based on the profitability index criterion? Why or why not?

Reference no: EM132012681

Questions Cloud

Which alternative would you choose in given case : You are negotiating for the terms of a legal settlement, and your opponent's attorney has presented you with the following alternative settlement alternatives.

Explain the underdevelopment of africa : Which theory has more credibility, Out of Africa or Multiregional World? Being specific, why?

What is the monthly payment : Consider a home mortgage of $250,000 at a fixed APR of 6% for 15 years. What is the monthly payment?

What is the percentage change in carter bond value : What is the percentage change in Milner’s bond value? What is the percentage change in Carter’s bond value?

Should project accept based on profitability index criterion : Nelson's Industrial Supply is considering a project that has projected cash inflows of $6,000 a year for 4 years. The initial cost of the project is $16,800.

What is the total return percentage : What is the total return percentage? What is the annual return percentage?

Calculate the total present value of these payments : Calculate the total present value of these payments if the interest rate is 12% compounded semi-annually.

What is the balance in the account after five years : What is the balance in the account after five years? what is the balance in the account after 20 years? The APY for the account is?

What is initial cash outflow for the replacement project : What is the initial cash outflow for the replacement project? What is the net present value (NPV) and should the company replace the old assembly machine?

User Account

All Pages