Compute the PI Statistic for Project Q and Advise the Firm

question 90

Multiple Choice

Compute the PI statistic for Project Q and advise the firm whether to accept or reject the project with the cash flows shown below if the appropriate cost of capital is 12 percent. Project Q

• A) The project's PI is -8.70% and the project should be rejected.
• B) The project's PI is -11.70% and the project should be rejected.
• C) The project's PI is 3.70% and the project should be accepted.
• D) The project's PI is 5.70% and the project should be accepteD.Step 1: Find NPV using financial calculator: NPV = -86.95; Step 2: -86.95/1000 = -8.70% and since PI<0 reject.

---

Definitions:

POST

Power-On Self-Test, an initial set of diagnostic tests performed by a computer's firmware that checks the system's hardware components and ensures everything is working properly before starting up.

GUI

Stands for Graphical User Interface, a visual way of interacting with a computer using items like windows, icons, and menus, instead of text-based commands.

Pin

A personal identification number, which is a numeric or alphanumeric password used in securing access to devices or digital accounts.

Desktop

A personal computer designed to fit on or under a desk, distinct from portable laptops or mobile devices.