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Task 5 : The firm is considering the purchase of a new device that costs 6,000. Assume a required rate of return of 11% and
Task 5:
The firm is considering the purchase of a new device that costs 6,000. Assume a required rate of return of 11% and the following cash flow schedule:
| Year 1 | 3,000 |
| Year 2 | 1,000 |
| Year 3 | 2,000 |
- Calculate the profitability index of the project.
- Should the firm accept this project?
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The Bank Analysts Handbook Money Risk And Conjuring Tricks
Authors: Stephen M. Frost
1st Edition
0470091185, 978-0470091180
