Question: Badr & Sons. is evaluating 2 (TWO) mutually exclusive investment projects. INITIAL CAPITAL OUTLAY for both projects are as stated in Year 0. The companys

Badr & Sons. is evaluating 2 (TWO) mutually exclusive investment projects. INITIAL CAPITAL OUTLAY for both projects are as stated in Year 0. The companys REQUIRED RATE OF RETURN IS 10.50% and sets 2.5 YEARS AS ITS MINIMUM (DESIRED) PAYBACK PERIOD.

Information about cash flows from the project for the next four years is tabulated below:

YEAR

PROJECT ALPHA

PROJECT BETA

0

SR -185,000

SR -145,000

1

45,000

41,000

2

75,000

45,000

3

55,000

55,000

4

66,000

70,000

What is PROFITABILITY INDEX for PROJECT BETA ONLY .?

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