7. 8. Calculate the Accounting Rate of Return (ARR) for the project with the following net income. Initial Investment Net Income in Year 1 Net Income in Year 2 Net Income in Year 3 Net Income in Year 4 a. 136.67%. c. 26.55%. Calculate the Profitability Index (PI) for the project with the following cash flows. The firm's cost of capital is 10%. Time 0 1 2 3 4 5 a. $3,307. $3,000 $1,500 $2,000 $2,200 $2,500 b. 36.67%. Cash Flow -$2,800 200 500 800 1,300 1,970 b. $3,438. c. 1.181. d. 16.74%. d. 1.146.