What is the approximate profitability index

Reference no: EM13258149

Cheryl Pack purchased a computer network for herclassroom. The computer network cost $100,000. Sheestimates that she can charge $500 for one session in theclassroom. Cheryl knows that enrollment will increase overtime. She estimates 50 students the first year, 75 studentsthe second year, 100 students the third year, and 150 students thefourth year. If her cost of capital is 12 percent, what is the approximate profitability index?

(a) $1.05.

(b) $1.19.

(d) $1.88.

Reference no: EM13258149

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