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Yokam Company is considering two alternative projects. Project 1 requires an initial investment of $410,000 and has a present value of cash flows of $1,700,000.

Yokam Company is considering two alternative projects. Project 1 requires an initial investment of $410,000 and has a present value of cash flows of $1,700,000. Project 2 requires an initial investment of $5 million and has a present value of cash flows of $6 million.

Compute the profitability index for each project.

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