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A New Product Has Start-Up Costs of $389,200 and Projected

Question 3

Multiple Choice

A new product has start-up costs of $389,200 and projected cash flows of $102,000,$187,500,and $245,000 for Years 1 to 3,respectively.What is the profitability index given a required return of 14 percent?


A) 0) 98
B) 0) 83
C) 1) 16
D) 1) 03
E) 1) 21

Correct Answer:

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