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The LSUS Corporation has a project costing $ 4 0 , 0 0 0 and cash flows of $ 8 , 5 0 0 ,

The LSUS Corporation has a project costing $40,000 and cash flows of $8,500,$15,600, and $22,700 for Years 1 to 3, respectively. Based on the profitability index rule, should the project be accepted if the discount rate is 9.5 percent? Why or why not? (Hint: to compute PI, you need to use the CF functions and intentionally define the CF0 as zero on your financial calculator, so that you will not double count the initial cash outflow)
a. Yes; because the PI is negative
b. Yes; because the ?PI is 1.03
c. No; because the ?PI is 0.95
d. No; because the ?PI is 1.03
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