Provide correct answer general Accounting question XYZ Manufacturing is considering investing in new automatedmachinery for their production line. The project requires aninitial investment of $125,000. After careful analysis, thefinancial team has determined that the project has a profitabilityindex of 1.45.Calculate:a) The present value of future cash inflows from this investmentb) The net present value (NPV) of the projectc) Based on the profitability index, should XYZ Manufacturingproceed with the investment?

Step 1: Define Profitability Index (PI)The Profitability Index (PI) is a financial metric that…

Answered: XYZ Manufacturing is considering…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter11: Capital Budgeting And Risk

Section: Chapter Questions

Problem 24P

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