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You would like to invest in the following project. Year Cash Flow 0 -$48,500 1 20,400 2 19,500 3 22,400 Your firm is looking to
You would like to invest in the following project.
Year | Cash Flow |
0 | -$48,500 |
1 | 20,400 |
2 | 19,500 |
3 | 22,400 |
Your firm is looking to invest only in projects returning at least $1.05 in today's dollars for every $1 invested. Your firm uses an 18 percent discount rate to all cash flows. Based on these criteria, you should:
reject the project because the PI is 1.08.
reject the project because the PI is 0.93.
accept the project because the PI is 0.93.
accept the project because the PI is 1.08.
accept the project because the PI is 1.06.
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