What is profitability index given assigned discount rate

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Reference no: EM132001173

1. Roy’s Welding projects cash flows of $13,500, $20,400, and $32,900 for Years 1 to 3 for a project with an initial cost of $45,000. What is the profitability index given an assigned discount rate of 15 percent?

A. .92

B. .97

C. 1.03

D. 1.08

E. 1.14

2. A project has cash flows of -$119,000, $52,800, $60,200, and $33,100 for years 0 to 3, respectively. The required rate of return is 12 percent. Based on the net present value of _____, you should _____ the project.

A. $230.75; accept

B. -$1,995.84; reject

C. $283.60; accept

D. -$147.60; accept

E. -$306.15; reject

Reference no: EM132001173

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