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Terrius Company considers a new project that has the following cash flow and the required rate of return (WACC) data. What is the project's profitability
Terrius Company considers a new project that has the following cash flow and the required rate of return (WACC) data. What is the project's profitability index (PI)? Do you think the company should accept the project?
Required Return: 8.00%
Year | 0 | 1 | 2 | 3 | 4 | 5 |
Cash flows | -$3,500 | $800 | $800 | $825 | $825 | $825 |
0.93; accept | ||
0.93; reject | ||
1.08; accept | ||
1.08; reject |
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