Multiple Choice
A 25- year project has a cost of $1,500,000 and has annual cash flows of $400,000 in years 1-15, and $200,000 in years 16-25. The company's required rate is 14%. Given this information, calculate the profitability index of the project.
A) 1.74
B) 1.50
C) 1.25
D) 1.00
E) 0.75
Correct Answer:
Verified
Correct Answer:
Verified
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