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Problem:

A firm is reviewing a project that has an initial cost of $71,000. The project will produce annual cash inflows, starting with year 1, of $8,000, $13,400, $18,600, $33,100 and finally in year five, $37,900.

Required:

Question: What is the profitability index if the discount rate is 11 percent?

Note: Please show how to work it out.

Accounting Basics, Accounting

  • Category:- Accounting Basics
  • Reference No.:- M91170752

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