Gold Mining, Inc. is using the profitability index (PI) when evaluating projects. Gold Mining's cost of capital
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Question:
Gold Mining, Inc. is using the profitability index (PI) when evaluating projects. Gold Mining's cost of capital is 11.90 percent. What is the PI of a project if the initial costs are $2,353,801 and the project life is estimated as 6 years? The project will produce the same after-tax cash inflows of $447,851 per year at the end of the year.
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