Question 3 Given 10% discount rate, what is the profitability index of the investment project described below?     1.00     0.90     0.95     1.03     1.09   Question 4   What is the best method to use when expressing investment profitability as a percentage? Pick from the answers given below.       Payback period     Discounted payback period     NPV     AAR     IRR

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Question 3

Given 10% discount rate, what is the profitability index of the investment project described below?

    1.00

    0.90

    0.95

    1.03

    1.09

 

Question 4

 

What is the best method to use when expressing investment profitability as a percentage? Pick from the answers given below.

 

    Payback period

    Discounted payback period

    NPV

    AAR

    IRR

Year
0
1
123
2
3
Cash Flows ($)
-78,000
30,000
28,000
46,000
Transcribed Image Text:Year 0 1 123 2 3 Cash Flows ($) -78,000 30,000 28,000 46,000
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