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Accounting

Problem:

A company is planning an expansion. The initial investment is $480,000 and anticipates cash inflows as listed below. The cost of capital is 12.2%.

Requirement:

Question: What is the profitability index and should the firm go ahead with the project?

Years	Cash Inflows
1	$90,000
2	105,000
3	105,000
4	195,000
5	195,000
6	195,000

Note: Provide support for your rationale.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91170318

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