What is the profitability index of this project?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:JFINEX Corporation is considering a new
project that will cost 110,000. The project is
expected to generate cash flows over the next
four years in the amounts of +200,000 in year
one, -30,000 in year two, -25,000 in year
three,
and +50,000 in year four. The required rate of
return is 12%.
What is the profitability index of this project?
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