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Francisco Trujillo is contemplating a project with an initial investment of $50,000. Francisco also has a discount rate of 8%. If the project has estimated net annual cash flows of $12,000 for the next six years, what is the profitability index for the project?

  1. 1.03.
  2. 1.07.
  3. 1.11.
  4. 1.27.

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