Question
Based on the profitability index rule, should a project with the following cash flows be accepted if the discount rate is 12 percent? Why or
Based on the profitability index rule, should a project with the following cash flows be accepted if the discount rate is 12 percent? Why or why not? (i.e. Calculate the profitability index (PI) and explain why the project should or should not be accepted.)
Year Cash Flow
1 -32,000
2 11,800
3 0
4 22,600
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Financial Reporting And Statement Analysis A Strategic Approach
Authors: Clyde P. Stickney, Paul Brown, James M. Wahlen
5th Edition
032418638X, 978-0324186383
