Cash Year Flow -24 9,600 4,700 2 5,300 3 2,200 a. What is the profitability index for the cash flows if the relevant discount rate is 9 percent? Profitability index b. What is the profitability index for the cash flows if the relevant discount rate is 18 percent? Profitability index

Cash Year Flow -24 9,600 4,700 2 5,300 3 2,200 a. What is the profitability index for the cash flows if the relevant discount rate is 9 percent? Profitability index b. What is the profitability index for the cash flows if the relevant discount rate is 18 percent? Profitability index

Financial And Managerial Accounting

15th Edition

ISBN:9781337902663

Author:WARREN, Carl S.

Publisher:WARREN, Carl S.

Chapter26: Capital Investment Analysis

Section: Chapter Questions

Problem 2MAD: Assume San Lucas Corporation in MAD 26-1 assigns the following probabilities to the estimated annual...

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Concept explainers

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.

Question

Cash
Flow
Year
-4
9,600
4,700
5,300
2,200
1
2
a. What is the profitability index for the cash flows if the
relevant discount rate is 9 percent?
Profitability index
b. What is the profitability index for the cash flows if the
relevant discount rate is 18 percent?
Profitability index

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