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Your firm is going to purchase a new piece of equipment. The equipment costs $1,035,000. The project will last 3 years. It will generate free
Your firm is going to purchase a new piece of equipment. The equipment costs $1,035,000. The project will last 3 years. It will generate free cash flows of $768,000 in year 1. The project will generate free cash flows of $1,092,000 in year 2. In the final year the project will generate free cash flows of $1,833,000. The required rate of return on the project is 11.9% compounded annually. What is the project's Profitability Index? Your answer should be accurate to two decimal places.
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