Estimated cash inflows for project A are as follows , respectively ; $ 10.000 , 7.000 ,9.000,15.000,8.000 and 10.000 . If the investment cost is $ 40.000 and the capital cost is % 10 , what is the profitability index -1 of the project ? a.1,31 b.2,13 c1,06 d.0,16 e.2,31

Estimated cash inflows for project A are as follows , respectively ; $ 10.000 , 7.000 ,9.000,15.000,8.000 and 10.000 . If the investment cost is $ 40.000 and the capital cost is % 10 , what is the profitability index -1 of the project ? a.1,31 b.2,13 c1,06 d.0,16 e.2,31

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter10: The Basics Of Capital Budgeting: Evaluating Cash Flows

Section10.6: Profitability Index (pi)

Problem 2ST

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Concept explainers

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.

Question

a.1,31

b.2,13

c1,06

d.0,16

e.2,31

Definition Definition Transfer of funds into a company by any third party, which may happen due to any operational, investing, and financing activities. The cash inflow includes payments made by customers or investments made by the investors into the company by purchasing its equity.

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