Muscat Co. is considering purchasing a new Equipment for its production. The new equipment will require an initial investment of OMR 600, an inflow of OMR 250 for the next 3 years and a cost of capital of 10 percent?

What is the profitability index (PI) of this project.

Select one:

a. 1.036

b. 2.739

c. 0.667

d. None of the answers are correct

e. 2.036