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A new product has start-up costs of $83,000 and projected cash flows of $44,000 per year for Years 1 to 6, and $101,000 for Year

A new product has start-up costs of $83,000 and projected cash flows of $44,000 per year for Years 1 to 6, and $101,000 for Year 7. What is the profitability index given a required return of 14.5 percent?

  • 2.5

  • 2.2

  • 2.9

  • 2.0

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