Consider a project with the following information:

Year
After-tax
Accounting
Profits from
After-tax
Cash Flow
Operations
1 $799 $750
2 150 1,000
3 200 1,200
Initial outlay = $1,500
Compute the profitability index if the company's discount

rate is 10%.
A) 1.61 B) 1.81 C) 0.62 D) 15.8


A

Business

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