Your organization has been asked to invest in a continuing care retirement center. Your investment will be $600,000 per year for the next five years. After five years, cash flows will be $400,000 per year for the next 15 years. If your discount rate is 10 percent:
a) What is the present value of the investment?
b) What is the present value of the cash flows?
c) What is the profitability index?