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Assume the firm invests $110,000 today to get $29,000 at Year 1 (i.e. one year from now). $26,000 at Year 2, $35,000 at Year 3,

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Assume the firm invests $110,000 today to get $29,000 at Year 1 (i.e. one year from now). $26,000 at Year 2, $35,000 at Year 3, $43,000 at Year 4. $27,500 at Year 5, and $16,500 at Year 6. Assuming the required rate of return for the firm's industry is 11.1%, what is this project's profitability index? 0.14 1.14 1.36 0.24 D Question 7 2.5 pts Same facts as above, but assume that the firm expands its investment such that the revenues will go up by 20%, but the discount rate will also increase to 19.5%. What is the new profitability index? 0.15 0.10 1.15 1.10

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