Peter Is Considering a Project with an Initial Cost of $42,000

question 253

Multiple Choice

Peter is considering a project with an initial cost of $42,000 and annual cash inflows of $9,100 a year for six years. What discount rate, when applied to this project, will produce a profitability index
Of 1.0?

• A) 7.00%
• B) 7.65%
• C) 7.88%
• D) 8.05%
• E) 8.11%