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What is the profitability index of a project

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Reference no: EM132885142

Question 1: Gold Mining, Inc. is using the profitability index (PI) when evaluating projects. Gold Mining's cost of capital is 12.09 percent. What is the PI of a project if the initial costs are $1,582,037 and the project life is estimated as 8 years? The project will produce the same after-tax cash inflows of $627,518 per year at the end of the year.

Reference no: EM132885142

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