A capital project at a cost of $10,000 should generate cash flow of $1000 in one year, then cash flow of $1100 in three semesters, then cash flow of $1200 in two years, then cash flow of 1300 $ at the end of each semester over an infinite number of periods. What is its profitability index (RI) with a discount rate of 5% per semester?

 

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To calculate the profitability index PI of the given capital project we need to find the present val... View the full answer