A project has a NPV of 15,000 when the cutoff rate is 10%. The annual cash flows are 20,505 on an investment of 50,000. What is the profitability index?

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter10: Capital Budgeting: Decision Criteria And Real Option
Section: Chapter Questions
Problem 1P
icon
Related questions
Question

A project has a NPV of 15,000 when the cutoff rate is 10%. The annual cash flows are 20,505 on an investment of 50,000. What is the profitability index?

Expert Solution
steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Employee benefits
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
EBK CONTEMPORARY FINANCIAL MANAGEMENT
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT