A project costs $12,000 and has a discount rate of 15%. Calculate the profitability index of the project that has cash flows of $2,500 in years 1 and 2, and $4000 in years 3 and 4
A) 0.75
B) 0.98
C) 1.08
D) 1.14
E) 1.28
A
You might also like to view...
Which of the following is NOT as a risk associated with ERP implementation?
a. A drop in firm performance after implementation because the firm looks and works differently than it did while using a legacy system. b. Implementing companies have found that staff members, employed by ERP consulting firms, do not have sufficient experience in implementing new systems. c. Implementing firms fail to select systems that properly support their business activities. d. The selected system does not adequately meet the adopting firm's economic growth. e. ERP's are too large, complex, and generic for them to be well integrated into most company cultures.
A cost that will not be affected by later decisions is termed a sunk cost
Indicate whether the statement is true or false
Simons, Inc sells plasticware
The following information summarizes Simons' operating activities for the year: Utilities Expense $ 65,000 Rent Expense 10,000 Sales Commissions Expense 32,500 Purchases of Merchandise 260,000 Merchandise Inventory on January 1 65,000 Merchandise Inventory on December 31 97,500 Sales Revenue 650,000 Prepare an income statement for Simons, Inc, a merchandiser, for the year ended December 31 using the format below: Sales Revenue Cost of Goods Sold: Beginning Inventory Purchases Cost of Goods Available for Sale Ending Inventory Cost of Goods Sold Gross Profit Selling Expenses: Sales Commissions Expense Administrative Expenses: Rent Expense Utilities Expense Total Operating Expenses Operating Income What will be an ideal response
The Druid Fund has a NAV of $9.00 and an offer price of $9.45. We know, then, that
A) Druid is a load fund. B) Druid is about to be issued to the public as a no-load fund with a $0.45 offer cost. C) shares can be purchased only through a stockbroker. D) there is a $0.45 premium paid to investors to buy the shares.