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Corporate Finance · Quiz 1 · 27 Oct 2024 · September 2024 term

Question 21: There is a project which requires an initial investment …

Question 21

+4 marksOne correct option

There is a project which requires an initial investment of 500 units today. This project pays off 500 units after 5 years, 500 units after 10 years and 500 units after 15 years. If the prevailing constant interest rate in the economy is 10% then what is the profitability index of the project?

  1. A

    122.93

  2. B

    3.56

  3. C

    1.25

  4. D

    0.80

Show answer

Correct answer

  • C

    1.25

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Question 21 of 25 in the IIT Madras BS Corporate Finance (Corporate Finance) Quiz 1 paper sat on 27 Oct 2024, in the September 2024 term (IIT M DEGREE AN EXAM QDB2 27 Oct 2024). It carries 4 marks.

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