Homework #6D (Profitability Index)

Homework #6D (Profitability Index)

Finance

Question 1 (1 point)

Find the profitability index (PI) for the following series of future cash flows, assuming the company’s cost of capital is 12.84 percent. The initial outlay is $468,612.

Year 1: $154,334

Year 2: $194,874

Year 3: $174,834

Year 4: $197,993

Year 5: $196,223

Round the answer to two decimal places.