Question: Pars estimates that a project will cost $ 5 0 , 0 0 0 and will generate cash inflows of $ 1 2 , 0

Pars estimates that a project will cost $50,000 and will generate cash inflows of $12,000 in Year 1, $20,000 in Year 3 and $25,000 in Year 5. If the discount rate is 10 percent, what is the profitability index for this project? Should he accept or reject the project?

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