Examveda
Examveda

Present value of future cash flows is Rs 2000 and an initial cost is Rs 1100 then profitability index will be

A. 55.00%

B. 1.82

C. 0.55

D. 1.82%

Answer: Option B

Solution(By Examveda Team)

Profitability index = Present value of future cash flow / Initial cost
= 2000 / 1100 = 1.82%.

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