The Timeline of an Investment Is Shown Above

question 10

Multiple Choice

The timeline of an investment is shown above.If the cost of capital is 5%,what is the profitability index of this investment?

• A)0.098
• B)0.105
• C)0.256
• D)0.368

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Definitions:

Capital Components

The various sources of funding that a company uses to finance its overall operations and growth, including debt and equity.

Pretax Cost

The expense or cost of an investment or operation before the deduction of taxes.

Weighted Average Cost

An accounting method to determine the average cost of goods sold or produced, taking into account the varying costs over time.

Tax Rate

The percentage at which an individual or corporation is taxed, varying based on income level, type of good, or service, among other factors.