A 50- Year Project Has a Cost of $500,000 and Has

question 49

Multiple Choice

A 50- year project has a cost of $500,000 and has annual cash flows of $100,000 in years 1-25, and $200,000 in years 26-50. The company's required rate is 8%. Given this information, calculate the
Profitability index of the project.

• A) 1.76
• B) 2.06
• C) 2.16
• D) 2.46
• E) 2.76

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Definitions:

New Deal

A series of programs, public work projects, financial reforms, and regulations enacted by President FDR in the United States during the 1930s to help recover from the Great Depression.

1960s

A decade marked by social change, political upheaval, and significant cultural developments, occurring from 1960 to 1969.

Dual Federalism

The political concept where state governments and the federal government have clearly defined and separate areas of authority and responsibility.

National Government

The organization through which political authority is exercised at the national level, governing the entire country.