You are building a retail mall for $10,000,000. The estimated net income or cash flow is $500,000 per year. The property is expected to sell for $11,500,000 at the end of the two-year holding period. Is it a viable investment decision if the needed rate of return or discount rate for the developed property is 15%? For evaluation, employ the Profitability Index technique.

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To determine whether the investment in the retail mall is viable we can use the Profitability Index ... View the full answer