Question

Asked Dec 1, 2019

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Compute the PI statistic for Project Q if the appropriate cost of capital is 13 percent. **(Do not round intermediate calculations and round your final answer to 2 decimal places.)**

Project Q | |||||

Time: | 0 | 1 | 2 | 3 | 4 |

Cash flow: | –$12,400 | $4,050 | $4,880 | $4,880 | $2,850 |

PI ________ ?

Step 1

**Calculation of Profitability Index (PI):**

The profitability index (PI) is **1.01**.

**Excel Spreadsheet:**

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