The relevant discount rate for the following set of cash flows is 14 percent. What is the profitability index?
A)0.89
B)0.93
C)0.99
D)1.03
E)1.07

Name: The relevant discount rate for the following set of cash flows is 14 percent. What is the profitability index? A)0.89 B)0.93 C)0.99 D)1.03 E)1.07
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Question

The relevant discount rate for the following set of cash flows is 14 percent. What is the profitability index? 
A)0.89 
B)0.93 
C)0.99 
D)1.03 
E)1.07

Quizplus · Accepted Answer

To calculate the profitability index, we divide the present value of the cash inflows by the initial investment. Without knowing the specific cash flows, we cannot calculate the profitability index.

The Relevant Discount Rate for the Following Set of Cash