1. ABC Inc. is considering an investment of $1,583 million with after-tax cash inflows of $318 million per year for six years and an additional after-tax salvage value of 77 million in Year 6. The required rate of return is 18%. What is the investment’s Profitability Index (PI)?
2. You have a $59,793 portfolio that consists of $18,581 invested in Stock A, $15,553 invested in Stock B, $4,401 invested in Stock C, and the remainder in Stock D. The portfolio has a return of 15.1 percent. The return for Stock A is 5.4 percent, for Stock B is 29.8 percent, and for Stock C is 8.1 percent. What is the return for Stock D?