Consider a Project That Requires an Immediate Cash Outflow of $100,000

question 134

Multiple Choice

Consider a project that requires an immediate cash outflow of $100,000 and provides a perpetual annual inflow of $15,000 starting two years from today.The cost of capital is 12%.What is the project's Profitability Index (PI) ?

• A)1.04
• B)1.12
• C)1.25
• D)1.33

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Definitions:

DNA

Deoxyribonucleic acid, a molecule that carries the genetic instructions used in the growth, development, functioning, and reproduction of all known living organisms and many viruses.

RNA

Ribonucleic acid, a nucleic acid present in all living cells that acts as a messenger carrying instructions from DNA for controlling the synthesis of proteins.

Point Mutations

Genetic alterations caused by the change of a single nucleotide base in the DNA sequence.

Mutations

Changes in the DNA sequence that affect genetic information, which can lead to variations in phenotype.