Project Management using Oracle Crystal Ball


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A four-year financial project has estimates of net cash flows shown in the following table
Year Net Cash Flow
1 $20,000
2 $25,000
3 $30,000
4 $35,000
It will cost $65,000 to implement the project, all of which must be invested at the beginning of the project. After the fourth year, the project will have no residual value.
Using the most likely estimates of cash flows, conduct a discounted cash flow calculation assuming a 20 percent hurdle rate with no inflation. What is the discounted profitability index of the project?


Solution ID:480095 | This paper was updated on 26-Nov-2015

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