What is the profitability index for each project

Assignment Help Financial Management
Reference no: EM132042184

The following are the cash flows of two projects: Year Project A Project B 0 $ 220 $ 220 1 100 120 2 100 120 3 100 120 4 100 If the opportunity cost of capital is 10%, what is the profitability index for each project? (Do not round intermediate calculations. Round your answers to 4 decimal places.)

Reference no: EM132042184

Questions Cloud

Pricing of tickets for stadium : Think about any local sports stadium. It has a fixed and limited capacity. How could you use the supply and demand model to illustrate pricing of tickets
Difference between progressive tax and regressive tax : Can you please explain the difference between progressive tax and regressive tax my text book is very confusing
Create plan of care for a young african american women : Give examples and support with evidence-based practice. (Create plan of care for a young African American women that is sexually active.
The project has net present value of zero : Brian is considering opening a McDonalds in Mumbai. His advisors believe the project has a net present value of zero.
What is the profitability index for each project : If the opportunity cost of capital is 10%, what is the profitability index for each project?
What must be the variable cost per unit : Accounting break-even: 50,000 units What must be the variable cost per unit?
Components of hr planning and technology : Examine the influence that technology has had in creating a strategic partnership between HR and the organization. Share one example to support your answer
What is current share price : Gruber Corp. pays a constant $9.65 dividend on its stock. What is the current share price?
How high can the discount rate : How high can the discount rate be before you would reject the project?

Reviews

Write a Review

Financial Management Questions & Answers

  Considering the purchase of new machine for project

You are considering the purchase of a new machine for a project. Details of this potential purchase are provided below.

  Investors full profit per share on the option contract

Suppose a call option has an exercise price of $35, and the underlying stock is trading for $30. The cost of the option is $2, and the option expires in one month. A month later, the option stock is trading for $41. Assuming the investor exercises th..

  What are the companys days sales in receivables

A company has net income of $183,000, a profit margin of 7.7 percent, and an accounts receivable balance of $122,370. Assuming 80 percent of sales are on credit, what are the company’s day’s sales in receivables?

  Current status of government securities in a short paper

Learn more about government issued T-bills and munis. Would you invest in government issued T-bills? Why or why not? Are there specific munis you would or would not invest in? What factors affect your choices? Write your analysis of the current statu..

  Strategy-cost and payoff of the options and total payoff

A trader creates a long butterfly spread from options with strike prices $60, $65, and $70 by trading a total of 400 options. The options are worth $11, $14, and $18. What is the maximum net gain (after the cost of the options is taken into account)?..

  Should the project be accepted or rejected-accepted rejected

Compute the NPV statistic for Project Y if the appropriate cost of capital is 13 percent. (Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your final answer to 2 decimal place.) Project Y Time: 0 ..

  1 evaluate the performance of a company using various

1. evaluate the performance of a company using various financial analytical tools.2. analyse different patterns of

  What is your one period rate of return on the bond

You buy a 3-year, 10% coupon bond with face value $1000 today. The market interest rate currently is 10% also. You hold the bond for a year and sell it off a year later when the interest rate is 12%. What is the market price of the bond a year later?..

  Draw a time line depicting the situation

Draw a time line depicting the situation: 5 years, an interest rate of 7.45%, and payments of $14,500 at the end of each of those years.

  What is the required return for this portfolio

Your client decides to invest $1.4 million in Blandy stock and $0.6 million in Gourmange stock. What are the weights for this portfolio? What is the portfolio's beta? What is the required return for this portfolio?

  Compute the price paid by investors for the paper

Student Pleasers, Inc. issues $5 million (face value) in commercial paper, at a discount yield of 7.8%. The maturity is 270 days. Compute the price paid by investors for the paper. (solve to the nearest dollar). After computing the price, compute the..

  What is dollar amount of interest paid on commercial paper

Horizon Telecom sold $300,000 worth of 120-day commercial paper for $298,000. What is the dollar amount of interest paid on the commercial paper? What is the effective 120-day rate on the paper?

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