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Assume the firm invests $115,000 today to get $33,000 at Year 1 (i.e. one year from now), $26,000 at Year 2,$35,000 at Year 3,$43,000 at

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Assume the firm invests $115,000 today to get $33,000 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 $30,500 at Year 6 . Assuming the required rate of retum for the firm's industry is 11.2%, what is this project's profitability index? 1.33 0.19 1.36 1.19 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 22%, but the discount rate will also increase to 19.5%. What is the new profitability index? 0.16 0.10 1.16 1.10

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