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    Profitability Index

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    Year Project A Project B
    0 -$200 -200
    1 82 100
    2 80 100
    3 80 100
    4 80

    Question 6: Profitability Index - If the opportunity cost of capital is 11 percent, what is the profitability index for each project? Does the profitability index rank the project incorrectly?

    © BrainMass Inc. brainmass.com October 9, 2019, 10:37 pm ad1c9bdddf
    https://brainmass.com/economics/macroeconomics/profitability-index-project-226126

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    Answer:
    As we know that,

    Year Project A Project B Discount rate @11% PV of Cash Flows (project A) PV of Cash Flows (project ...

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    This solution is comprised of answers related with Profitability Index.

    $2.19