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Apple Inc. is deciding whether to pursue a project based on the profitability index rule. The following information is given: the required initial investment =
Apple Inc. is deciding whether to pursue a project based on the profitability index rule. The following information is given: the required initial investment = 705,670; future net cashflows=400,000 in the first year, 250,000 in the second year, and 150,000 in the third year; the discount rate = 14%. What is the profitability index? Can this project be undertaken?
0.91; No
0.08; Yes
0.91; Yes
0.08; No
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