Question: A project engineer has collected information on the increment of annual net cash flow (NCF) as shown below. At an interest rate of 10% per

A project engineer has collected information on the increment of annual net cash flow (NCF) as shown below. At an interest rate of 10% per year, calculate the Profitable Index (PI) of the cash flow and determine if the cash flow is economically worthwhile.

Year 0 1 2 3 4 5 6
NCF, $1,000 per year 0 5 7 9 11 13 20
Investment, $1,000 15 8 10 0 0 5 10

0.89 (Not Justified)

1.12 (Justified)

1.35 (Justified)

0.73 (Not Justified)

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