Question
Aviation Inc. is considering a new inventory system that will cost $375,000. The system is expected to generate $315,000 in year one, -$25,000 (negative) in
Aviation Inc. is considering a new inventory system that will cost $375,000. The system is expected to generate $315,000 in year one, -$25,000 (negative) in year two, $110,000 in year three, and $150,000 in year four. Aviation's required rate of return is 10%. What is the Profitability Index of this project?
A. 1.2
B. .53
C. 1.7
D. 2.1
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Investments An Introduction
Authors: Herbert B Mayo
9th Edition
324561385, 978-0324561388
