Dizzyland Enterprises Has Been Presented with an Investment Opportunity Which

question 74

Multiple Choice

Dizzyland Enterprises has been presented with an investment opportunity which will yield end-of-year cash flows of $30,000 per year in Years 1 through 4,$35,000 per year in Years 5 through 9,and $40,000 in Year 10.This investment will cost the firm $150,000 today,and the firm's cost of capital is 10%.What is the profitability index for this investment?

• A)1.34
• B)0.87
• C)1.85
• D)0.21

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Definitions:

Toxic

Describes substances or environments that are harmful or poisonous to living organisms.

Norepinephrine

A neurotransmitter and hormone involved in the body's fight or flight response, affecting attention, heart rate, and other physiological functions.

Serotonin

A neurotransmitter that is believed to play a key role in maintaining mood balance.

Depression

A common and serious medical illness that negatively affects how you feel, the way you think, and how you act, leading to feelings of sadness and/or a loss of interest in activities once enjoyed.