Compute the PI statistic for Project Z if the appropriate co

Compute the PI statistic for Project Z if the appropriate cost of capital is 6 percent. (Do not round intermediate calculations. Round your final answer to 2 decimal places.) Time: Cash flow$1,200 $390 $520 $690 $340 $140 Pl Should the project be accepted or rejected? O Accepted O Rejected

Solution

NPV=-1200+390/1.06+520/1.06^2+690/1.06^3+340/1.06^4+140/1.06^5=583.988

PI=1+NPV/Initial Investment=1+583.988/1200=1.4867