Question: 1. Based on the profitability index rule, should a project with the following cash flows be accepted if the discount rate is 12 percent? Why

1. Based on the profitability index rule, should a project with the following cash flows be accepted if the discount rate is 12 percent? Why or why not?

Year

Year Cash Flow
0 $-26,200
1 $11,800
2 $0
3 $24,900

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