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Consider the following projects: Cash Flows ($) Co -11,900 -21,900 Assume that the projects are mutually exclusive and that the opportunity cost of capital
Consider the following projects: Cash Flows ($) Co -11,900 -21,900 Assume that the projects are mutually exclusive and that the opportunity cost of capital is 8%. a. Calculate the profitability index for each project. b-1. Calculate the profitability-index using the incremental cash flows. b-2. Which project should you choose? Project D G 23,800 38,325
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To calculate the profitability index we need to divide the present value of the cash flows by the initial investment for each project The present valu...
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Intermediate Financial Management
Authors: Eugene F. Brigham, Phillip R. Daves
11th edition
978-1111530266
