Profitability index when evaluating projects

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Reference no: EM131459311

Gold Mining, Inc. is using the profitability index (PI) when evaluating projects. Gold Mining’s cost of capital is 14.79 percent. What is the PI of a project if the initial costs are $1,985,640 and the project life is estimated as 8 years? The project will produce the same after-tax cash inflows of $468,985 per year at the end of the year.

Round the answer to two decimal places.

Reference no: EM131459311

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