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

Question

  

  

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

  

  

  

What is the profitability index if the discount rate is 14 percent? (Do not round intermediate calculations.Round your answer to 3 decimal places (e.g., 32.161).)

    

  

  

What is the profitability index if the discount rate is 21 percent? (Do not round intermediate calculations.Round your answer to 3 decimal places (e.g., 32.161).)

  

  

Consider the following cash flows:

Explanation / Answer

Dec-15 Dec-16 Dec-17 Dec-18 Cash flows -28800 14900 14000 10400 Discount Rate % 9% Free Cash Flow -28800 13669.72 11783.52 8030.708 PV of Future Cash Flows 33483.95 Initial Investment 28800 Profitability Index = PV of Future Cash Flows/Initial Investment 1.163

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