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You are analyzing a project with the following cash flows: Year zero - 8 0 , 0 0 0 Year one 4 5 , 0

You are analyzing a project with the following cash flows:
Year zero -80,000
Year one 45,000
Year two 0
Year three 32,000
a) Calculate the projects profitability index assuming a discount rate of 7% per year.
B) Explain why the project should be accepted or rejected based on the profitability index.

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