Business Homework Solutions
#120867
Profitability Index
If a project has a cost of $50,000 and a profitability index of 0.4, then:
A) its cash inflows are $70,000.
B) the present value of its cash inflows is $30,000.
C) its IRR is 20%.
D) its NPV is $20,000.
Deals with a multiple-choice question based on concept of profitability index. The solution is explained for better understanding.
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