Consider a project with the following cash flows - 4231

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. Consider a project with the following cash flows: After-Tax After-Tax Accounting Cash Flow Year Profits from Operations 1 $799 $ 750 2 $150 $1,000 3 $200 $1,200 Initial outlay = $1,500 Terminal cash flow = 0 Compute the profitability index if the company’s discount rate is 10%. 

a. 15.8 

b. 1.61 

c. 1.81 

d. 0.62 

 
Solution Description

. Consider a project with the following cash flows: After-