Problem 8-13 Calculating Profitability Index [LO 6] Consider the following cash flows: Year Cash Flow 0 −$ 29,700 1 14,000 2 14,900 3 11,300 What is the profitability index for the cash flows if the relevant discount rate is 12 percent? Note: Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161. What is the profitability index if the discount rate is 17 percent? Note: Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161. What is the profitability index if the discount rate is 24 percent? Note: Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161.

Problem 8-13 Calculating Profitability Index [LO 6] Consider the following cash flows: Year Cash Flow 0 −$ 29,700 1 14,000 2 14,900 3 11,300 What is the profitability index for the cash flows if the relevant discount rate is 12 percent? Note: Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161. What is the profitability index if the discount rate is 17 percent? Note: Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161. What is the profitability index if the discount rate is 24 percent? Note: Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161.

Financial Reporting, Financial Statement Analysis and Valuation

8th Edition

ISBN:9781285190907

Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Chapter14: Valuation: Market-based Approach

Section: Chapter Questions

Problem 18PC

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Problem 8-13 Calculating Profitability Index [LO 6]

Consider the following cash flows:

Year	Cash Flow
0	−$ 29,700
1	14,000
2	14,900
3	11,300

What is the profitability index for the cash flows if the relevant discount rate is 12 percent?

Note: Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161.
What is the profitability index if the discount rate is 17 percent?

Note: Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161.
What is the profitability index if the discount rate is 24 percent?

Note: Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161.

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