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5. AAA Company is considering purchasing an apartment building that will cost 900,000. This project expects cash inflows as detailed below: Year 1 Year 2

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5. AAA Company is considering purchasing an apartment building that will cost 900,000. This project expects cash inflows as detailed below: Year 1 Year 2 Year 3 Year 4 $100,000 $200,000 $300,000 $250,000 The appropriate discount rate for this project is 15% Required: What is the profitability index for this investment? Should the project be accepted? Why or why not

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