Salalah Mills has taken up a new project with an initial investment of 30000 OMR.The expected future cashflow from the project over the next three years will be 12500 OMR, 14500 OMR and 15400 OMR.What is the profitability index if the discount rate is 11 percent?

Salalah Mills has taken up a new project with an initial investment of 30000 OMR.The expected future cashflow from the project over the next three years will be 12500 OMR, 14500 OMR and 15400 OMR.What is the profitability index if the discount rate is 11 percent?

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 19EA: Redbird Company is considering a project with an initial investment of $265,000 in new equipment...

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Concept explainers

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.

Question

Salalah Mills has taken up a new project with an initial investment of 30000
OMR.The expected future cashflow from the project over the next three years
will be 12500 OMR, 14500 OMR and 15400 OMR.What is the profitability index
if the discount rate is 11 percent?

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