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The Mesquite Team - Roping Group is considering buying a rodeo arena in Las Vegas, with the following expected cash flows: Initial Outlay = $

The Mesquite Team-Roping Group is considering buying a rodeo arena in Las Vegas, with the following expected cash flows: Initial Outlay = $750K, incremental after-fax CFs from operations in Years 1-4= $250K/yr., & additional after-tax terminal cash flow at end of Year 4= $40K. Using a discount rate of 12%, compute the NPV of this project and the profitability index of the arena project.

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