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PMI-PBA - Financial Analysis and Feasibility Studies
Intermediate
1/100
A project has an initial investment of $100,000 and is expected to generate present value cash flows of $150,000. What is the Profitability Index (PI) for this project?
a.
2.5 as we add the initial investment to present value
b.
1.5
c.
0.67 since we need to divide cash flows by investment cost
d.
0.5 because we subtract investment from cash flows
Intermediate