What is the profitability index for the set of cash flows if the relevant discou

Question

What is the profitability index for the set of cash flows if the relevant discount rate is 9 percent? (Do not round intermediate calculations and round your final answer to 3 decimal places. (e.g., 32.161))

Profitability index=

What is the profitability index for the set of cash flows if the relevant discount rate is 14 percent? (Do not round intermediate calculations and round your final answer to 3 decimal places. (e.g., 32.161))

Profitability index=

What is the profitability index for the set of cash flows if the relevant discount rate is 21 percent? (Do not round intermediate calculations and round your final answer to 3 decimal places. (e.g., 32.161))

Profitability index=

YEAR CASH FLOW 0 -17600.00 1 9900.00 2 8800.00 3 5300.00

Explanation / Answer

1.

Year 0 Year 1 Year 2 Year 3 Dec-15 Dec-16 Dec-17 Dec-18 Cash flows -17600 9900 8800 5300 Discount Rate 9.0% PV of cash flows -17600 9082.57 7406.78 4092.57 NPV 2981.93 IRR 9.5% Profitability index = pv of fufuture cash flows/initial investment 1.169

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