Problem:
Consider the following cash flows: Year Cash Flow 0 $-29,600 1 14,100 2 14,800 3 11,200 Requirement 1: What is the profitability index for the above set of cash flows if the relevant discount rate is 11 percent?
Required:
Question 1: What is the profitability index if the discount rate is 16 percent
Question 2: What is the profitability index if the discount rate is 23 percent?
Note: Please show how you came up with the solution.