Project profitability index calculator
[DOC File]BALANCE OF PAYMENTS
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According to the Profitability Index calculation at a 5% cost of capital Project L will yield $1.21 for every dollar invested in the project. Note: At a 10% cost of capital Project S would be superior based on the PI calculation. 5. Payback Period – The payback period is the expected number of years required to recover the original investment.
[DOC File]FINANCE FUNDAMENTALS
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When evaluating a project the Syncrude economic model also looks at the project’s payback and profitability index. Here are the basics of how these measures are calculated and what they tell you. Payback Rule . Payback is the amount of time it takes for accumulated cash flows to equal or surpass your initial investment. The investment ...
[DOC File]EffTool User's Manual
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The net present value is a more advanced investment criterion than the payback period. If NPV is positive, the replacement project is profitable. Profitability index. Equals NPV per investment. Profitability index can be used to rank replacement projects. Estimated cut in energy costs. This is the energy saving in percents. Buttons. Adjust ...
[DOC File]CHAPTER 3
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Project F: Profitability index = $11,006 ( 10,000 = 1.1 (c) Project E: IRR = 23.21%. Project F: IRR = 16.35 . 12-8 Project G: $4,300.00 x PVAIF5,r - $10,000 = 0. If you read across the five-year row of Table D, you will find that the discount factor 2.3256 is between the 32% and the 33% columns. Thus, the project’s IRR is between 32% and 33%. or by financial calculator: ENTER: CF0 = -10000 ...
[DOC File]A project has an initial cost of $52, 125, expected net ...
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2009-12-23 · A project has an initial cost of $52, 125, expected net cash inflows of $12,000 per year for 8 years, and a cost of capital 12 %. What is the projects NPV and projects payback period ?
CHAPTER 8
The profitability index is the present value of cash inflows relative to the project cost. As such, it is a benefit/cost ratio, providing a measure of the relative profitability of a project. The profitability index decision rule is to accept projects with a PI greater than one, and to reject projects with a …
[DOC File]1 - JustAnswer
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2008-10-11 · Calculate the net present value and profitability index of a project with a net investment of $20,000 and expected net cash flows of $3,000 a year for 10 years. if the project's required return is 12%. Is the project acceptable? NPV = -$20,000 + $3,000(PVIFA0.12,10) = - $20,000 + $3,000(5.650) = -$3,050. PI = $3,000(5.650)/$20,000 = 0.85. The project is not acceptable because it has a negative ...
[DOC File]A
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The profitability index is the same as the NPV, except that we divide the PVCF by the initial outlay: E. PROFITABILITY INDEX (PI) The profitability index, or PI, method compares the present value of future cash inflows with the initial investment on a relative basis. Therefore, the PI is the ratio of the present value of cash flows (PVCF) to the initial investment of the project.
[DOC File]RWJ 7th Edition Solutions
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The profitability index is the present value of cash inflows relative to the project cost. As such, it is a benefit/cost ratio, providing a measure of the relative profitability of a project. The profitability index decision rule is to accept projects with a PI greater than one, and to reject projects …
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