1. Which of the following statements is FALSE?
The payback period tends to ignore the later cash flows.
The payback period is useful as a rough measure of a project's liquidity.
The payback period ignores the time value of money.
The payback period depends on the cost of capital (WACC).
2. XYZ Inc. is evaluating a project. The project requires an inital investment of $ 78 million, and has an estimated NPV of $17 million. What is the profitability index of this proposed project?