1 answer

MC algo 9-21 Calculating Profitability Index POD has a project with the following cash flows: Year...

Question:

MC algo 9-21 Calculating Profitability Index POD has a project with the following cash flows: Year Skipped Cash Flows -$253,0

MC algo 9-21 Calculating Profitability Index POD has a project with the following cash flows: Year Skipped Cash Flows -$253,000 146,900 164,400 129,500 References 2 The required return is 8.2 percent. What is the profitability Index for this project?

Answers

Profitability index is calculated by using the below formula:

Profitability Index= NPV + Initial investment/ Initial investment

Net present value can be solved using a financial calculator. The steps to solve on the financial calculator:

  • Press the CF button.
  • CF0= -$253,000. Indicate the initial cash flow by a negative sign since it is a cash outflow.  
  • Cash flow for each year should be entered.
  • Press Enter and down arrow after inputting each cash flow.
  • After entering the last cash flow cash flow, press the NPV button and enter the required return of 8.2%.
  • Press enter after that. Press the down arrow and CPT buttons to get the net present value.  

Net present value at 8.2% required return is $125,425.29.

Profitability Index= $125,425.29 + $253,000/ $253,000

                                    = $378,425.29/ $253,000

                                    = 1.4958   1.50

In case of any query, kindly comment on the solution.

.

Similar Solved Questions

1 answer
Give a description of what you believe to be the consequences of a healthcare organization not...
Give a description of what you believe to be the consequences of a healthcare organization not involving nurses in each stage of the SDLC when purchasing and implementing a new health information technology system. Provide specific examples of potential issues at each stage of the SDLC and explain h...
1 answer
6. Four (4.00) moles of a perfect gas at 250.0 K and 1.50 bar pressure undergo...
6. Four (4.00) moles of a perfect gas at 250.0 K and 1.50 bar pressure undergo a reversible isothermal compression until the pressure becomes 3.00 bar. Calculate: q, w, AU, AH and AS....
1 answer
8,Daniel's end-of-period spreadsheet at the end of July has $4,950 in the Balance Sheet Credit column...
8,Daniel's end-of-period spreadsheet at the end of July has $4,950 in the Balance Sheet Credit column for Accumulated Depreciation. The end-of-period spreadsheet at the end of August has $7,600 in the Balance Sheet Credit column for Accumulated Depreciation. What is the amount of the depreciatio...
1 answer
Question 2 Part 1: A 10022 resistance is directly switched on across a 10V battery. What...
Question 2 Part 1: A 10022 resistance is directly switched on across a 10V battery. What is the current through the resistor? How much is the power consumed by the resistor? Also find the energy consumed by the resistor in 5 seconds? (2 Points) Part 2: Find the equivalent resistance R across x-y in ...
1 answer
A common design requirement is that an environment must fit the range of people who fall...
A common design requirement is that an environment must fit the range of people who fall between ] 15 A common design reqirement is that an environment must fit the range of people who fall between the 5 percentile for women and the 95 percentile for men. In designing an assembly work table, the sit...
1 answer
Q2. A pile group consists of 9 solid floating piles in cohesive soil. Each pile's diameter...
Q2. A pile group consists of 9 solid floating piles in cohesive soil. Each pile's diameter (d) is 0.50 m and the centre-to-centre spacing (s) is 2.5 m. The subsoil consists of a thick deposit of stiff cohesive clay with an unconfined cohesion of 80 kPa. The total unit weight of soil is 17 kN/m3....
1 answer
Middler Corporation, a manufacturer of electronics and communications systems, uses a service department charge system to...
Middler Corporation, a manufacturer of electronics and communications systems, uses a service department charge system to charge profit centers with Computing and Communications Services (CCS) service department costs. The following table identifies an abbreviated list of service categories and acti...
1 answer
Help S. Rowen, Inc. adds direct materials at the beginning of the process, while conversion costs...
Help S. Rowen, Inc. adds direct materials at the beginning of the process, while conversion costs are incurred uniformly throughout the process. At the beginning of the period, Work in Process Inventory was 50% complete. At the end of the period, Work in Process Inventory was 60% complete. Rowen, In...
1 answer
Fugacity in terms of compressibility factor and molar volume
Starting from the fundamental expression of fugacity [dG = RT d(ln f)], derive a general expression for the fugacity coefficient (φ) in terms of the compressibility factor (Z) and molar volume (V)....
1 answer
4 poin QUESTION 15 Supposed a closed economy (NX-0) and that GDP is $8,046, taxes are...
4 poin QUESTION 15 Supposed a closed economy (NX-0) and that GDP is $8,046, taxes are $4,471, transfers are $609, consumption is $3,393, and public savings are $1,546. What is government spending?...
1 answer
3. (10 pts.) Use logical equivalences to show that (p r)v(q r) and (pAq) r ane...
3. (10 pts.) Use logical equivalences to show that (p r)v(q r) and (pAq) r ane logically equivalent....
1 answer
Which of these combinations will result in a reaction? O K(s)Au3 +(aq) O Neither combination will...
Which of these combinations will result in a reaction? O K(s)Au3 +(aq) O Neither combination will result in a reaction. O Both combinations will result in a reaction. 0 K+(aq) + Au(s)...
1 answer
JAVA coding The Sorted List ADT Implement the SortedList class. The SortedList class extends the ...
JAVA coding The Sorted List ADT Implement the SortedList class. The SortedList class extends the AbstractList class. Both can be seen here. Your assignment is to implement (recursively) all of the abstract methods of the AbstractList class. They are: insert (recursive) iterator remove (recursi...
1 answer
Imagine that six binary bits are to be transmitted to a place where electrical noise is an issue ...
please solve the following question by showing the steps with comments!! Imagine that six binary bits are to be transmitted to a place where electrical noise is an issue and you would like to perform a parity generation/check to make sure that the received product is error free. Assuming that only a...
1 answer
X Ctrans-3-Methyl-2-pentene C6H X gen.wileyplus.com/edugen/student/mainfr.uni Klein, Organic Chemistry, 3e CO7T1009438 Give an IUPAC name for the...
x Ctrans-3-Methyl-2-pentene C6H X gen.wileyplus.com/edugen/student/mainfr.uni Klein, Organic Chemistry, 3e CO7T1009438 Give an IUPAC name for the following compound: (2)-3-ethyl-4-methyl-2-heptene (Z)-3-ethyl-5-methyl-2-heptene (Z)-4-ethyl-3-methyl-2-hexene (2)-3-ethyl-4-methyl-2-hexene (Z)-3-ethyl-...
1 answer
Question 12 Alkenes and alkynes are called unsaturated compounds because Othey have more carbon atoms than...
Question 12 Alkenes and alkynes are called unsaturated compounds because Othey have more carbon atoms than alkanes they have fewer carbon atoms than alkanes they have the maximum number of hydrogen atoms attached to each carbon in the compoun Othey have more hydrogen atoms attached to the carbon cha...
1 answer
Design a small part of the EERD (mini-world) for the Student entity type that illustrates all...
Design a small part of the EERD (mini-world) for the Student entity type that illustrates all the specializations (with attributes) for that entity type...