What is the profitability index for above set of cash flow

Assignment Help Financial Management
Reference no: EM131014923

Consider the following cash flows: Year Cash Flow 0 $-28,900 1 14,800 2 14,100 3 10,500

Requirement 1: What is the profitability index for the above set of cash flows if the relevant discount rate is 8 percent? (Do not round intermediate calculations. Round your answer to 3 decimal places (e.g., 32.161).) Profitability index ____________

Requirement 2: What is the profitability index if the discount rate is 13 percent? (Do not round intermediate calculations. Round your answer to 3 decimal places (e.g., 32.161).) Profitability index_____________

Requirement 3: What is the profitability index if the discount rate is 20 percent? (Do not round intermediate calculations. Round your answer to 3 decimal places (e.g., 32.161).) Profitability index_____________

Reference no: EM131014923

Questions Cloud

What is the temperature of the final state : A diaphragm separates the two compartments. Each compartment has a volume of 1 L. Suddenly, the diaphragm ruptures. Use the vander Waals equation for any nonideal behavior. What is cv at the initial state?
Conduct a current health insurance situation analysis : Conduct a current health insurance situation analysis for the Bedos. Be sure to assess the following: a. The after-tax costs of their current plans compared to purchasing an individual policy. b. The use of a tax-advantaged account as a health insura..
The irs adjustment caused a tax deficiency to be assessed : The IRS adjustment caused a tax deficiency to be assessed for both the regular income tax and the AMT.
How much is the investment worth in todays terms : An investment offers the following cash flows: $100 one year from now, $150 two years from now, $150 in 3 years, $900 in 4 years, and $600 in 5 years. If the relevant interest rate is 8% per year (an APR, with interest compounded annually), how much ..
What is the profitability index for above set of cash flow : What is the profitability index for the above set of cash flows if the relevant discount rate is 8 percent?  What is the profitability index if the discount rate is 13 percent?
How much heat is transferred this process : The initial pressure is 10 bar, and the initial molar volume is 3 3 1023 m3/mol, and the final volume is 0.05 m3/mol. Take the temperature of the surroundings to be 298 K. Use the van der Waals equation of state and What is the initial temper..
Supplier offers to supply component at an annual payment : Betty's Home Décor is considering whether to produce a component in-house or whether to purchase it from a supplier. A supplier offers to supply the component at an annual payment of $120,000 over three years (payable at the beginning of years 2, 3, ..
How much work is done on the system : One mole of methane in a piston-cylinder assembly undergoes an adiabatic compression from an initial state 1 P1 5 0.5 bar, v1 5 0.05 m3/mol 2 to a final state 1 P2 5 10 bar, v2 5 3 3 1023 m3/mol 2 . Use the van der Waals equation of state for noni..
What is the after-tax salvage value of the asset : An asset is used in a four-year project falls in the five-year MACRS class for tax purposes. The asset has an acquisition cost of $8,600,000 and will be sold for $1,890,000 at the end of the project. If the tax rate is 35 percent, what is the after-t..

Reviews

Write a Review

Financial Management Questions & Answers

  Finance is very challenging and rewarding field

Finance is a very challenging and rewarding field. It is exciting area because financial managers are given the responsibility to plan the future growth of the firm which can greatly affect the community in which it is doing business.

  Calculate the outstanding loan balance immediately

A loan is amortized over five years with monthly payments (i.e. end of month) at an annual nominal interest rate of 5% compounded monthly. The first payment is 500 and is to be paid one month from the date of the loan. Calculate the outstanding loan ..

  Comparing option hedging to futures hedging

When comparing option hedging (hedging with options) to futures hedging (hedging with futures), which statement is most true:

  What is the projects net present value if the tax rate

A project has an initial requirement of $89,218 for equipment. The equipment will be depreciated to a zero book value over the 5-year life of the project. The investment in net working capital will be $21,134. All of the net working capital will be r..

  Assume interest rates for bonds

Assume interest rates for bonds today is 5% for an AAA rated bond. Calculate the price of the bond you have selected relative to the 5%. Is the bond selling at a premium or a discount? Why? Be sure to show how you arrived at your answer. What other f..

  What was the growth rate in earnings per share

10 years ago, Weed Go Inc. earned $0.53 per share. Its earnings this year were $4.58. What was the growth rate in earnings per share (EPS) over the 10-year period? State your answer as a percentage to two decimal places (e.g. 16.38%). The % sign is n..

  What is the estimated cost of common equity using the CAPM

Booher Book Stores has a beta of 1.2. The yield on a 3-month T-bill is 4% and the yield on a 10-year T-bond is 6%. The market risk premium is 7%. What is the estimated cost of common equity using the CAPM?

  Firm is operating under conditions of capital rationing

Estimating weighted cost of capital. Assume the following percentage capital structure is considered optimal for this firm. The firm is operating under conditions of capital rationing and therefore will not sell new stock to the public. What is the w..

  EBIT indifference level associated with two financing plan

Abe Forrester and three of his friends from college have interested a group of venture capitalists in backing their business idea. The proposed operation would consist of a series of retail outlets to distribute and service a full line of vacuum clea..

  Whole foods market than at the fairway supermarket

At the 0.01 level of significance, is there evidence that the mean price is higher at Whole Foods Market than at the Fairway supermarket?

  At a management meeting you suggested that the production

at a management meeting you suggested that the production department should transfer goods produced at a value above

  Result in initial aftertax cash savings

Scanlin, Inc., is considering a project that will result in initial aftertax cash savings of $1.71 million at the end of the first year, and these savings will grow at a rate of 1 percent per year indefinitely. What is the maximum initial cost the co..

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