Q 1. Find the profitability index (PI) for the following series of future cash flows, assuming the company’s cost of capital is 8.96 percent. The initial outlay is $454,308. Year 1: $125,691 Year 2: $185,573 Year 3: $177,234 Year 4: $176,064 Year 5: $182,750 Round the answer to two decimal places. 2.Gold Mining, Inc. is using the profitability index (PI) when evaluating projects. Gold Mining’s cost of capital is 11.63 percent. What is the PI of a project if the initial costs are $1,551,145 and the project life is estimated as 8 years? The project will produce the same after-tax cash inflows of $549,114 per year at the end of the year. Round the answer to two decimal places. 3.Good Morning Food, Inc. is using the profitability index (PI) when evaluating projects. You have to find the PI for the company’s project, assuming the company’s cost of capital is 11.70 percent. The initial outlay for the project is $441,026. The project will produce the following end-of-the-year after-tax cash inflows of Year 1: $189,131 Year 2: $81,788 Year 3: $105,193 Year 4: $215,678 Round the answer to two decimal places. A project has an initial outlay of $3,473. It has a single payoff at the end of year 5 of $7,573. What is the profitability index (PI) of the project, if the company’s cost of capital is 13.29 percent? Round the answer to two decimal places.

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