A Project Has an Initial Investment of $95,000

Multiple Choice

A project has an initial investment of $95,000. Its four year cash inflows are estimated to be $21,000 in year 1, $23,000 in year 2, $25,000 in year 3, and $27,000 in year 4. If the rate of return
Is 8%, calculate the project's Profitability Index.

A) 1.83
B) 1.53
C) 1.03
D) 0.83
E) 0.53