The following information is available for a potential investment for Panda Company: Initial investment $95,000 Net annual cash inflow 20,000 Net present value 36,224 Salvage value 10,000 Useful life 10 yrs. The potential investment's profitability index is. a.2.62.
b.3.22.
c.4.75.
d.1.38.

The potential investment's profitability index is 1.38.

The profitability index is used to determined the profitability of a project. It is a capital budgeting method

Profitability index = 1 + (NPV / Initial investment)

The net present value is the cost of an asset less the sum of the discounted cash flows of the project.

Profitability index = 1 + (36,224 / 95,000) = 1.38

A similar question was answered here: link

d. 1.38

Explanation:

The computation of potential investment's profitability index is shown below:-

As we know that

Profitability index (PI) = PV of future cash flows ÷ Initial investment

Now

NPV = Present value of future cash flows - initial investment

$36,224 = Present value of future cash flows - $95,000

Present value of future cash flows = $36,224 + $95,000

= $131,224

So,

Profitability index = Present value of future cash flows ÷ Initial investment

= $131,224 ÷ $95,000

= 1.38

Therefore we have applied the above formula.

net worth is the difference between what you own and what you have. if you exceed your liabilities you have a positive net worth. if your liabilities are greater than your assets you have a negative net worth. its a snapshot of your financial situation. if you calculate your net worth you will see the end result of everything you've earned and spent as of now. net worth statements and all you asked of can you determine where you are, how to get where you want to be, if your spending   to much. honestly it can tell you a lot of things. i can go on, but you can paint the picture from here.

explanation:

a ab