Question: A real estate developer plans to construct and then rent a 15 unit office building. The construction costs will be incurred immediately and are expected

A real estate developer plans to construct and then rent a 15 unit office building. The construction costs will be incurred immediately and are expected to be $675. The annual cash flow on all units is expected to be $200 starting in one year and continuing for a total of three consecutive years. Calculate the profitability index for the office building using a required rate of return of 7.250%.

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