Year Cash Flow 0 –$ 17,200 1 9,500 2 8,400 3 4,900 a. What is the profitability index for the set of cash flows if the relevant discount rate is 10 percent? b. What is the profitability index for the set of cash flows if the relevant discount rate is 15 percent? c. What is the profitability index for the set of cash flows if the relevant discount rate is 22 percent?
Year Cash Flow 0 –$ 17,200 1 9,500 2 8,400 3 4,900 a. What is the profitability index for the set of cash flows if the relevant discount rate is 10 percent? b. What is the profitability index for the set of cash flows if the relevant discount rate is 15 percent? c. What is the profitability index for the set of cash flows if the relevant discount rate is 22 percent?
Financial Management: Theory & Practice
16th Edition
ISBN:9781337909730
Author:Brigham
Publisher:Brigham
Chapter7: Corporate Valuation And Stock Valuation
Section: Chapter Questions
Problem 11P: Brook Corporation’s free cash flow for the current year (FCF0) was $3.00 million. Its investors...
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Question
Year | Cash Flow | ||
0 | –$ | 17,200 | |
1 | 9,500 | ||
2 | 8,400 | ||
3 | 4,900 | ||
a. |
What is the profitability index for the set of cash flows if the relevant discount rate is 10 percent? |
b. |
What is the profitability index for the set of cash flows if the relevant discount rate is 15 percent?
|
c. | What is the profitability index for the set of cash flows if the relevant discount rate is 22 percent? |
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