Question: Gold Mining, Inc. is using the profitability index (PI) when evaluating projects. Gold Mining's cost of capital is 7.45 percent. What is the PI of
Gold Mining, Inc. is using the profitability index (PI) when evaluating projects. Gold Mining's cost of capital is 7.45 percent. What is the PI of a project if the initial costs are $2,216,770 and the project life is estimated as 5 years? The project will produce the same after-tax cash inflows of $666,101 per year at the end of the year.
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