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Calculate the Profitability Index of the Project using the given interest rate and 8%. The interest rate is 5%.

Calculate the Profitability Index of the Project using the given interest rate and 8%. The interest rate is 5%.

Principles of Accounting Volume 2
Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 18EA: Consolidated Aluminum is considering the purchase of a new machine that will cost $308,000 and...
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ABC Company Limited looking to invest in one of the proposed projects. The cost of that project is $50,000 and cash inflows and outflows are projected for 5 years, as shown in the below table. Calculate the Profitability Index of the Project using the given interest rate and 8%. The interest rate is 5%.  

Years

Cash Inflows

Cash Outflows

0

 

      (50,000.00)

1

     20,000.00

     

 5,000.00

2

     14,000.00

     

 2,000.00

3

     12,000.00

     

 2,000.00

4

     12,000.00

     

 2,000.00

5

     15,000.00

     

 1,000.00

Net Present Value

 

 
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