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Because the profitability index measures how much value a project creates for each dollar that is invested, it is calculated as a . PV of
Because the profitability index measures how much value a project creates for each dollar that is invested, it is calculated as
a PV of future cash flows divided by the initial cost.
b initial cost divided by the PV of future cash flows.
c internal rate of return divided by the initial cost.
d net present value divided by the initial cost.
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