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A firm is evaluating a project which will cost $10,269 today and provide cash flows in years 1, 2, and 3 of $7,560, $3,286, $3,268 and, respectively. The firm’s discount rate is 8%. What is the profitability index?

a. 1.21

b. 0.86

c. 1.46

d. 0.99

e. 1.58

Financial Management, Finance

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