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Q4.Hogwarts Inc. is considering a project with the following cash flows: Initial cash outlay = $2,500,000 After-tax net operating cash flows for years 1 to

Q4.Hogwarts Inc. is considering a project with the following cash flows: Initial cash outlay = $2,500,000 After-tax net operating cash flows for years 1 to 4 = $779,000 per year Additional after-tax terminal cash flow at the end of year 4 = $600,000 Compute the profitability index of this project if Hogwarts' WACC is 11%.

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