Question: Freddy's BBQ, a Washington D.C. area ribs joint which caters to high level politicians, is looking to open a new franchise in Philadelphia. They anticipate

Freddy's BBQ, a Washington D.C. area ribs joint which caters to high level politicians, is looking to open a new franchise in Philadelphia. They anticipate that the new restaurant will cost $20.7 M to open today, but will produce cash flows of $6.9 M, $8.5 M, and $7.4 M over the next three years, respectively. What is the profitability index of this investment given a 14.09% required return?

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