What is the profitability index for an investment with the following cash flows given a 9 percent required return?
Year Cash Flows
0 -$21,000
1 7,400
2 9,500
3 8,900

Answers

Answer 1

The profitability index (PI) is a measure that indicates the value created per dollar invested in a project. It is calculated as the present value of future cash flows divided by the initial investment.

To calculate the PI for this investment, we need to first calculate the present value of the cash flows.
To do this, we can use the formula:

PV = CF / (1 + r)t

Where PV is the present value, CF is the cash flow in a given year, r is the required return, and t is the time period.

Using this formula, we can calculate the present value of the cash flows as follows:

PV0 = -$21,000 (no need to discount year 0 since it is already in the present)
PV1 = 7,400 / (1 + 0.09)1 = $6,788.07
PV2 = 9,500 / (1 + 0.09)2 = $7,400.48
PV3 = 8,900 / (1 + 0.09)3 = $6,452.71

Now that we have the present values of the cash flows, we can calculate the net present value (NPV) of the investment as follows:

NPV = PV1 + PV2 + PV3 - PV0
NPV = $6,788.07 + $7,400.48 + $6,452.71 - $21,000
NPV = -$68.74

Since the NPV is negative, the investment does not meet the minimum threshold for a positive NPV and should not be undertaken.

Finally, we can calculate the PI as follows:

PI = PV of future cash flows / Initial investment
PI = ($6,788.07 + $7,400.48 + $6,452.71) / $21,000
PI = 0.84

The PI is less than 1, which means that the project does not create value in excess of the initial investment. Therefore, this investment is not recommended even though the PI is above zero.

Learn more about profitability index here:

https://brainly.com/question/30641835

#SPJ11


Related Questions

what percentage of CTE learners enroll in post secondary education?​

Answers

Answer:

10th-grade public school students in 2002 who were CTE concentrators in high school, 72 percent enrolled in postsecondary education by 2006, or two years after their expected year of high school graduation, and 84 percent enrolled by 2012, or eight years after their expected year of high school graduation.

Answer:

75% – Percentage of high school students concentrating in a CTE discipline who pursue post-secondary education 43% – Percentage of young workers holding a CTE-related license or certificate who earn more than those holding an associate degree

Explanation:

Facts about the chip category obtained from AC Nielsen are?


syndicated data.



survey data.



questionnaire data.



primary data.



experimental data.

Answers

Answer:

Explanation:

Then what is the question

The markets for prostitution in Nevada and New Jersey have two important differences: 1) prostitutes in New Jersey face higher costs because of government efforts to prosecute them and 2) customers in New Jersey face higher risks of contracting diseases from prostitutes because the illegal nature of the business makes reliable information about product quality much more costly to obtain. Given these facts, which state would you expect the price of prostitution services to be higher? Why? Which state would have the higher amount of services consumed (adjusted for population differences)? Why? What are the underlying economic issues of this market?

Answers

Answer:

Given these facts, which state would you expect the price of prostitution services to be higher? Why?

Since the risks associated to prostitution are higher in New Jersey, we could assume that the price for these services will be higher there. The supply curve of prostitution shift to the left, increasing the price and decreasing the quantity.

Which state would have the higher amount of services consumed (adjusted for population differences)? Why? What are the underlying economic issues of this market?

Since the price is higher in New Jersey, the quantity demanded will be lower. Also, the risks associated to consuming the service will shift the demand curve to the left, reducing the quantity.

who wants to make a call??

Answers

Answer:

Zoom you mean?

Explanation:

Answer:

I want to call my mom,lol

What careers are in the Information Support and Services career pathway of the IT career cluster? (15 points for you)

Question 1 options:

graphic artists, painters, artists


broadcasters, journalists, writers


help desk specialists, PC support specialists

Answers

I think it’s “help desk specialists, PC support specialists”

HELP ME PLEASEE!! ILL GIVE CROWN!!!
which of the following should credit be used for?
A. small things you want
B. large things you need and that you can repay over time.
C. money that you can never afford to repay.
D. purchasing things you want so you dont have to save.

Answers

Answer:

B

Explanation:

Credit should be used for large things that you can't afford at the moment but over time will be able to repay (like bills). You should never purchase things that are too expensive for you to repay (within a year.)

Which of these is NOTa concern for consumers in times of inflation? a.They cannot anticipate the cost of goods and services. b.They lose money on their investments and savings. c.They are at a disadvantage when paying back borrowed money. d.They struggle when they are on a fixed income.

Answers

Answer:

c.They are at a disadvantage when paying back borrowed money.

Explanation:

In any economics of a country, inflation may be defined as the fall of the value of the money or currency of a country over a period of time. In inflation, the general price level increase and the value of money decreases.

Due to inflation, with each currency unit, less of goods or services can be bought. In inflation, the consumers are not concern about the disadvantage when they pay back the money that they borrowed because the value of the money decreases. Money decreases its value but the demand of goods and services increases in the economy.

What does the term 'user
experience' refer to regarding a
website?
A. the overall ease of navigation and ability to
purchase on a company's website
B. the general experience a customer has when
using a product of a business
C. the customer experience when dealing with
customer service representatives

Answers

Answer:b

Explanation:

If the food handler has been diagnosed with one of the Big 6 pathogens
they can return to work 24 hours after showing no symptoms.
TRUE
FALSE

Answers

It’s False bro trust me

Answer:

False.

Explanation:

Shareholders had a good year, earning a 29% annual rate of return. The PE ratio today is 10.0 and the company just announced earnings per share of $2.50. The company has a 90% payout ratio. How much did the stock price change over the past year?

Answers

Answer:

$3.68

Explanation:

Rate of return =29%

PE ratio = 10.0

Earning per share = $2.50

P1 = PE ratio * EPS

P1= 10*2.50

P1 = $25

Payout ratio = 90%

Dividend = 2.50*90%

Dividend = $2.25

Rate of return = (P1+D1-P0)/P0

0.29= (25 + 2.25 - P0)/P0

0.29 P0 = 27.50 - P0

1.29P0 = 27.50

P0 = 27.50/1.29

P0 = $21.32

Change in stock price = $25 - $21.32

Change in stock price = $3.68

Which of these is NOT a concern for consumers in times of inflation?
a.They cannot anticipate the cost of goods and services.
b.They lose money on their investments and savings.
c.They are at a disadvantage when paying back borrowed money.
d.They struggle when they are on a fixed income.

Answers

Answer: D

Explanation:

The risk-reward relationship says:

Answers

im not understanding this question.. can you reword it?

Which part of the check gives the bank permission to release the money?

Answers

Answer:

And even though all national banks and federally chartered credit unions are subject to the same hold rules, each institution can release your funds sooner at its discretion. By understanding the rules of funds availability, you can ensure you'll have access to your money when you need it.:

An oligopoly is a market structure in which a large number of firms dominate the market. T or F

Answers

Answer: F

Explanation:

An oligopoly is a market structure in which a large number of firms dominate the market.

An oligopoly is a market structure in which a large number of firms dominate the market. FALSE.

brief explain difference between moa and aoa ?​

Answers

Answer:

The MOA (Memorandum of Association) describes the powers and objects of the company, the AOA (Article of Association) defines its rules and the AOA (Articles of Association) is subordinate to the memorandum.

what's the answer? please help, it's overdue​

Answers

Answer: Honestly in my opinion that's a no

Explanation: because that's there imagine without them they wouldn't be able to get that image up and making profit therefore the player should get a cut of the profit that is made.

By law, an accountant must hold a CPA designation in order to
?

Answers

Answer:

The CPA designation isn't required to work in corporate accounting or for private companies. However, public accountants⁠—which are individuals working for a firm, such as Deloitte or Ernst & Young, that provides accounting and tax-related services to businesses—must hold a CPA designation.

Explanation:

Answer:

Prepare audited or reviewed financial statements.

Hope this helps :)

In VAT (Value added tax) is it profitable to buy in large or small quantities?​

Answers

It’s more profitable to buy in large quantities.

____ reading will increase your focus and concentration, help you understand the reading, and prepare you to study.

Answers

Answer:

Active.

Explanation:

Active reading can be defined as a process which typically involves an individual being focused on his or her study. It is aimed at acquiring knowledge and understanding of a particular subject or topic without distractions.

Hence, active reading will increase your focus and concentration, help you understand the reading, and prepare you to study.

What are three elements of negligence?
Actual Harm
Breach of duty
State of mind
Duty of care
Proximate cause
Motive

Answers

Answer:

actual harm

breach of duty

duty to act

Por que se dice que emprender suele ser una decisión muy difícil quien la toma sabe que esta renunciando a la estabilidad que otorga un salario

Answers

Answer:

porque se dice que quiero tomar el siguiente

Gianna put $1,000 in a savings account for 18 months. The interest on the account is 3.5%.

How much will Gianna earn in interest? What amount will she have at the end of the time period?

Answers

Answer:

You will earn $52.96 in interest

You have $1,052.96 in total.

What would Jamie Lee's financial liability have been had she waited more than two days to report the debit/ATM card lost or stolen

Answers

Explanation:

If Jamie notifies the bank within 2 days of the lost card , her liability for unauthorized would be $50.

Jamie Lee's as the account holder is financially responsible for any form of transfers or withdrawals that has or will be made from their accounts and until He report the theft, he will be liable to all withdrawals.

What is a Checking Account:

A checking account is known to be a kind of bank account that is often used by people as a deposit account.

The usual amount deposited by them in this account is known to be used for paying bills and other form of purchases.

Base on the fact above, Jamie Lee's would be liable for his financial liability because she had waited for more than two days to report her debit/ATM card lost or stolen and as such any theft that happen within those two days on her account is her fault.

Learn more about  checking account from

https://brainly.com/question/24751568

equity shareholders are called what ​

Answers

Answer:

owners

Explanation:

Shareholders' equity represents the amount invested by the owners of a company in the business by either retaining earnings over time or by investing money in it. The shareholders' equity is a form of a company's net assets. Equity shareholders are also known as Equity Stockholders.

The equity shareholders of a company are called its owners.

How do I find the cash flow coverage ratio?

Answers

Explanation:

There are a few different ways to calculate the cash flow coverage ratio formula, depending on which cash flow amounts are to be included. A general measure of the company’s ability to pay its debts uses operating cash flows and can be calculated as follows:

Cash flow coverage ratio = $80,000,000 / $38,000,000 = 2.105Cash flow coverage ratio = ($64,000,000 + $4,000,000 + $8,000,000) / $38,000,000 = 2

In what type of economy do individuals and firms determine what will be produced?
Mixed
Traditional
Market
Command

Answers

Answer:

market

Explanation:

I think it’s warket hope this helps

Suppose the GDP of the entire European Union is 350,000 euros and the exchange rate between euros and USD is 0.66 EURO=$1. What is the GDP of the European Union when measured in USD? Round your answer to the nearest hundredth.

Answers

Answer:

the GDP of the  European Union is $530,303.030

Explanation:

The computation of the GDP of the  European Union is shown below:

= Entire european union × euro ÷ exchange rate

= 350,000 euros × $1 ÷ 0.66

= $530,303.030

Hence, the GDP of the  European Union is $530,303.030

We simply applied the above formula

Matt works part-time and is paid $6.75 per hour. Determine Matt's gross pay (hours worked x hourly rate of pay) for last week when he worked 20.25 hours. Round your answer to the hundredths place.

Answers

Answer:

Matt's gross pay (hours worked x hourly rate of pay) for last week when he worked 20.25 hours is equal to $136.69

Explanation:

Per hour amount paid to Matt = $6.75

Total number of hours worked by Matt = 20.25

To find Gross pay, multiply hours worked and hourly rate of pay.

Therefore,

Matt's gross pay (hours worked × hourly rate of pay) for last week when he worked 20.25 hours [tex]=20.25(6.75)=\$136.6875[/tex] ≈ $136.69

HELP PLEASE!!!
what is the outcome when a person defaults on a home loan?
A. the person goes to jail.
B. the bank will make the person work a second job.
C.the bank will take the person's car.
D.the bank will foreclose on the home.

Answers

Answer:

D.the bank will foreclose on the home.

Explanation:

The bank may even sue and garnish wages and financial accounts. The bank may even serve a conversion of accetts.

Janice, a nurse at a hospital, is preparing a presentation for trainee nurses about guidelines for patient care. What is the purpose of her
presentation?


A. to persuade

B. to instruct

C. to entertain

D. to debate

Answers

Answer:

B

Explanation:

To teach and acknowledge the guidelines for trainee nurses to help patients in an effective way

Other Questions
the nurse is teaching a client about metformin sa. when the client asks, "what does the sa mean?" what is the appropriate nursing response? Write an acrostic poem based on Capricorn from Schooled. Each line mustbegin with the letters of his name, as provided. Each detail must demonstrate apersonality trait of his or event he was involved in. As organizations become more complex, it becomes increasingly important for managers to do what? a) Make each part of the organization less specialized. b) Lessen the complexity of the organization's environment c) Create mechanisms to coordinate different parts of the organization. d) Identify leaders for each part of the organization. a two-way between-subjects anova is appropriate for analyzing differences in the combination of levels for two or more factors. (True or False) an outcome that can result from either a price ceiling or a price floor is an enhancement of efficiency. undesirable rationing mechanisms. a surplus. a shortage. which term applies to a doctor who has a contract with your health plan? What is the explicit formula for the sequence? an = 1-en-1 nten0, 1-e 1-e 1-e 1-e 2+e, 2+e, 2+e4,2+e5, *. an 1-en-1 n+en+1 an = 1-en-1 2+en an || 1-en 2+en According to Michael Sandel in his first video in the Harvard Justice course, philosophy does what? Makes the ordinary appear strange Shows different ways of seeing the same old things Should not conclude with skepticism O All of the above Historically, the default rate on a certain type of commercial loan is 20 percent. If a bank makes 100 of these loans, what is the approximate probability that at least 26 will result in default? .0668 .0336 .0846 .2000 Compute the curl of the vector field. F = (x2 y2)i+ 4xyjcurl F = 1. +2, -5, +3, -4, +12. -9, -2, +7, -6, +53. -5, -8, -3, +4, +34. +8, +5, +2, +7, -65. -4, +6, -6, +4, -76. +8, +5, +9, -6, -97. -7, -2, +4, -5, -18. +3, +5, -5, +6, +29. -6, +4, -8, +7, -210. -3, +8, -4, +1, -7 Gerry is registering for classes next semesters. He is deciding between two teachers, Dr Anderson and Dr. Bean. He speaks To 17 friends that previously took the course from Dr. Anderson and also speaks to 17 friends that took it from Dr. Bean. Eight of his friends said they highly recommend Dr. Anderson. 11 of his friends highly recommended Dr. Bean cost of goodsl sold was 5345 accoutns payable increased 11281 and inventroy increased by18838 what was cash paid to suppliers peopole high in __ tend to perform well at work and live longer Jake net pay is $160. 65 after deductions of $68. 85. He makes $8. 50 per hour how much hours did he work? Show working outs **Excerpt taken from The Historic Rise of Old Hickory by Suzanne B. Williams**Four major candidates ran in the 1824 election, all under the "Democratic-Republican" name. One of the candidates, Andrew Jackson, was already famous. In the 1780s, he earned the right to practice law and served in various offices of the state government, including senator. He earned the nickname "Old Hickory" for his toughness as a general during the War of 1812 and First Seminole War. Jackson supported slavery and "Indian removal." This earned him support from voters in southern and frontier states. The other three candidates were John Quincy Adams of Massachusetts, Henry Clay of Kentucky, and William Crawford of Georgia.U.S. presidents are elected through the Electoral College. The Founding Fathers worried that Americans were too spread out to learn enough about the candidates. Under the Electoral College, Americans cast their ballot for the popular vote, which chooses the electors for each state. The number of electoral votes each state equals the number of representatives and senators combined. The candidates must win an absolute majority of electoral votes to win the election.In 1824, Andrew Jackson won the popular vote, but he did not win it in each state. Jackson and Adams both won many electoral votes. Jackson won the most with 99. However, a candidate needs an absolute majority of electoral votes to win. In 1824, Jackson needed 131 to win. When there is not majority winner, the election goes to the House of Representatives. This has only happened twice in U.S. history.Even though he won the popular vote and many electoral votes, Andrew Jackson lost the presidency in 1824. John Quincy Adams was the Secretary of State at this time. Henry Clay was the Speaker of the House of Representatives. Henry Clay, receiving the least, was left out. However, as a leader in the House of Representatives, he had influence over the other members. Clay openly hated Jackson and there were rumors that Clay made a deal with Adams in exchange for his support. The House election declared John Quincy Adams president. Soon, he chose Henry Clay to fill the seat he left vacant, Secretary of State. Jackson was shocked and enraged. Although there was no inquiry of possible wrongdoing, Jackson accused Adams and Clay of making a "corrupt bargain."John Quincy Adams was a disappointment as president. Many of his goals created divisions like federal funds for internal improvement. Some states thought that taking federal funds would force them to follow certain rules. They felt this reduced their rights as independent states. Jackson took advantage of issues like this one to gather more support. More Jackson supporters found their way to seats in Congress. He was as a man of the people and said Adams could never understand the common mans concerns.John Quincy Adams ran against Andrew Jackson in the 1828 election. Personal attacks grew even more vicious, but Andrew Jackson appealed to many. He believed government was for the common man. He believed in strict reading of the law and limited internal improvements. He also believed in states rights.Andrew Jackson easily won the 1828 election, winning both the popular vote and a majority of electoral votes. Historians note the sectional nature of the voting. Support for Jackson was concentrated in South while Adams support was mostly in the North. Jackson was so popular because he brought changes to the government. He also wanted to make sure the government was responsible for its actions. Jackson pushed settlement into the frontier. He supported the Indian Removal act. He also defended the spread of slavery. Though his support was heavier in the South, he was determined to keep a unified nation. The rise and presidency of Old Hickory is memorable to Americans today.**Which of the following did Andrew Jackson not support?**A) A limited national governmentB) Spreading of slavery to the frontierC) Federal funds for internal improvementsD) A strict interpretation of the U.S. Constitution how many moles of n2o, nitrous oxide, are contained in 250. ml of the gas at stp? r = 0.08206 latm/kmol An electronic component dissipates 0.38 Watts through a heat sink by convection and radiation (Black Body) into surrounds at 20C. What is the surface temperature of the heat sink if the convective heat transfer coefficient is 6 W/m2K, and the heat sink has an effective area of 0.001 m2? Water flows through the 30-mm-diameter pipe and is ejected with a velocity of 25 m/s at B from the 10-mm diameter nozzle. Determine the pressure and the velocity of the water at A 300 mm 3. what is the coupon rate on a bond with a par value of $1,000, semi-annual coupons, 8 years until maturity, yield to maturity of 8.50 %, and price of $925.64