Nodak,IncIs Currently Considering an Eight-Year Project That Has an Initial

question 35

Multiple Choice

Nodak,Inc.is currently considering an eight-year project that has an initial outlay or cost of $160,000.The cash inflows from its project for years 1 through 5 are the same at $55,000.Nodak has a discount rate of 11%.Because there is a shortage of funds to finance all good projects,Nodak wants to compute the profitability index (PI) for each project.That way Nodak can get an idea as to which project might be a better choice.What is the PI for Nodak's current project?

• A)About 1.27
• B)About 1.24
• C)About 1.19
• D)About 1.09

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Definitions:

Conscious Marketers

Marketers who are mindful of the ethical and social impacts of their marketing strategies and strive to create positive change through their practices.

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Sectors of industry that provoke public debate and disagreement, often due to ethical, environmental, or health concerns.

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