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A four-year financial project has estimates of net cash flows given below:

Year Net Cash Flow
1 $20,000
2 $25,000
3 $30,000
4 $35,000

It will cost $65,000 to implement project, all of which should be invested in the beginning of project. After fourth year, project will have no residual value.

Using most probably estimates of cash flows, conducted discounted cash flow suppose a 20% hurdle rate with no inflation. Using Excel or pencil and paper, what is the discounted profitability index of the project?

 

Business Management, Management Studies

  • Category:- Business Management
  • Reference No.:- M931596

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