Compute the PI statistic for Project X and note

jagguarpaw January 9, 2017 0 Comments

Question: Compute the PI statistic for Project X and note wh…

 

Compute the PI statistic for Project X and note whether the firm should accept or reject the project with the cash flows shown below if the appropriate cost of capital is 11 percent.

  Time: 0 1 2 3 4 5
  Cash flow: -83 -83 0 108 83 58

 

11.00%, reject

12.40%, accept

25.71%, accept

10.29%, reject