A firm is considering an investment project with the following cash flows: Year 0 = -$120,000 (initial

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A firm is considering an investment project with the following cash flows:

Year 0 = -$120,000 (initial costs);

Year 1= $40,000;

Year 2 =$90,000; and

Year 3 = $30,000.

The company has a 9% cost of capital. What is the project’s profitability index (PI)?

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Corporate Finance

ISBN: 9781265533199

13th International Edition

Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe

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Posted Date: Dec 12, 2023 10:35 PM

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A firm is considering an investment project with the following cash flows: Year 0 = -$120,000 (initial

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The profitability index PI is calculated by dividing the present value of future cash flows by the i... View the full answer

Corporate Finance

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