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Homework answers / question archive / 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

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

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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?

   

0.87

   

1.85

   

0.21

   

1.34

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