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Culver Company is considering investing in a project that will cost $164,700 and have no salvage value at the end of its 5-year life. It
Culver Company is considering investing in a project that will cost $164,700 and have no salvage value at the end of its 5-year life. It is estimated that the project will generate annual cash flows of $45,700 each year. The company requires a 9% rate of return and uses the following compound interest table: Click here to view PV tables. (a) Compute the net present value and the profitability index of the project. (For calculation purposes, use 5 decimal places as displayed in the factor table provided. Round profitability index to 2 decimal places, e.g. 15.25 and net present value to 0 decimal places, e.g. 5,275.) Net present value $ Profitability index
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