WKW, Inc Is Analyzing a Project That Requires an Initial Investment

question 72

Multiple Choice

WKW, Inc. is analyzing a project that requires an initial investment of $10,000, followed by cash inflows of $1,000 in Year 1, $4,000 in Year 2, and $15,000 in Year 3. The cost of capital is 10%. What is the profitability index of the project?

• A) 1.04
• B) 1.55
• C) 1.78
• D) 1.97

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Definitions:

Systematic Desensitization

A behavioral therapy technique designed to gradually reduce fear, anxiety, or phobia by gradually exposing the person to the feared object or context in a controlled manner.

Systematic Desensitization

A behavioral therapy technique aimed at reducing phobic reactions and anxiety by gradually exposing the person to the feared object or context in a controlled manner.

Relaxation Exercises

Techniques designed to reduce stress and anxiety, promote relaxation, and improve overall mental and physical well-being, such as deep breathing, meditation, and progressive muscle relaxation.

Biologically Prepared

An inherent tendency in organisms to learn certain associations over others due to their survival advantages.