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    If a project has a cost of $50,000 and a profitability index

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    If a project has a cost of $50,000 and a profitability index of 0.4, then:
    A) its cash inflows are $70,000.
    B) the present value of its cash inflows is $30,000.
    C) its IRR is 20%.
    D) its NPV is $20,000.

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    https://brainmass.com/business/profitability-index/cost-profitability-index-120867

    Solution Summary

    Deals with a question based on concept of profitability index. The solution is explained for better understanding.

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