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weqwewe [10]
2 years ago
12

Suppose your firm is considering investing in a project with the cash flows shown as follows, that the required rate of return o

n projects of this risk class is 8 percent, and that the maximum allowable payback and discounted payback statistic for the project are three and three and a half years, respectively. Time 0 1 2 3 4 5 Cash Flow −100,000 30,000 45,000 55,000 30,000 10,000 Use the PI decision rule to evaluate this project; should it be accepted or rejected?
Business
1 answer:
alekssr [168]2 years ago
4 0

The profitability index decision rule of the project equals 2.45 year and thus, the project should be accept to be embarked on.

<h3>What is a profitability index?</h3>

The rule refers to a decision-making exercise that helps to evaluate whether to proceed with a project based on its profitability.

Hence, because the profitability index decision rule of the project equals 2.45 year and thus, the project should be accept to be embarked on.

Read more about profitability index

<em>brainly.com/question/18089407</em>

#SPJ1

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