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    Year Cash Flow PV of Future Cash Flows: Initial Investment 10,000 Cost of Capital 10%

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    motaleby
    The document outlines an initial investment project with a $10,000 investment and 10% cost of capital. It then lists the projected cash flows for 5 years, discounting them to calculate their present value. The profitability index is calculated as the present value of future cash flows divided by the initial investment, which is 0.97, indicating the investment is marginally unprofitable.

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    Year Cash Flow PV of Future Cash Flows: Initial Investment 10,000 Cost of Capital 10%

    Uploaded by

    motaleby
    60 views1 page
    The document outlines an initial investment project with a $10,000 investment and 10% cost of capital. It then lists the projected cash flows for 5 years, discounting them to calculate their present value. The profitability index is calculated as the present value of future cash flows divided by the initial investment, which is 0.97, indicating the investment is marginally unprofitable.

    Original Description:

    Profitability Index

    Original Title

    Profitability Index

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    The document outlines an initial investment project with a $10,000 investment and 10% cost of capital. It then lists the projected cash flows for 5 years, discounting them to calculate their present value. The profitability index is calculated as the present value of future cash flows divided by the initial investment, which is 0.97, indicating the investment is marginally unprofitable.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    60 views1 page

    Year Cash Flow PV of Future Cash Flows: Initial Investment 10,000 Cost of Capital 10%

    Uploaded by

    motaleby
    The document outlines an initial investment project with a $10,000 investment and 10% cost of capital. It then lists the projected cash flows for 5 years, discounting them to calculate their present value. The profitability index is calculated as the present value of future cash flows divided by the initial investment, which is 0.97, indicating the investment is marginally unprofitable.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    of 1

    Initial Investment

    Cost of Capital

    Total

    10,000
    10%

    PV of Future Cash Flows


    Year Cash flow
    1
    3000
    2727.27
    2
    4000
    3305.79
    3
    2000
    1502.63
    4
    1500
    1024.52
    5
    1800
    1117.66
    9677.87

    Profitability Index

    0.97

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