Question

Asked Oct 9, 2019

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A project requires an initial investment of $40 million. It generates cash flows of $25 million in one year and $27 million in two years. The projects required rate of return is 8% what is the project's profitability index?

Step 1

**Calculation of Profitability Index:**

The profitability index is **1.16**.

**Excel Spreadsheet:**

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