A Project Has an Initial Investment of $95,000

question 134

Multiple Choice

A project has an initial investment of $95,000. Its four year cash inflows are estimated to be $21,000 in year 1, $23,000 in year 2, $25,000 in year 3, and $27,000 in year 4. If the rate of return is 8%, calculate the project's Profitability Index.

• A) 1.83
• B) 1.53
• C) 1.03
• D) 0.83
• E) 0.53

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Definitions:

Political Party

An organized group that seeks to achieve political power by participating in electoral processes and promoting specific ideologies.

Fair-Minded

Characterized by impartiality and honesty; free from self-interest, prejudice, or favoritism.

Trustworthy

Deserving of trust or confidence, reliable and dependable in character, actions, and intentions.

Equity

The concept of fairness or justice in situations, ensuring fair treatment and distribution of resources among individuals or groups.