The following are the cash flows of an investment: Time 0, -$1,000,000, Time 1, $550,000, Time 2, $400,000, Time 3, $325,000. The cost of capital is 8%. Calculate the Profitability Index (PI) Ratio. Should the firm accept the project and why? Use the method introduced in class to calculate the Pl Ratio. 0.1102, No, because the PI Ratio 0 0.1102, Yes, because the PI Ratio T $ O 1.1102, Yes, because the PI Ratio > 1

The following are the cash flows of an investment: Time 0,$1,000,000, Time 1,$550,000, Time 2,$400,000, Time 3,$325,000. The cost of capital is 8%. Calculate the Profitability Index (PI) Ratio. Should the firm accept the project and why? Use the method introduced in class to calculate the PI Ratio. 0.1102 , No, because the PI Ratio 0 0.1102 , Yes, because the PI Ratio 1.1102, Yes, because the PI Ratio >1