What is the project profitability index

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Reference no: EM131351636

A project has an initial investment of $1,500,000. If the expected cash inflows from the project are $600,000 in year 1, $342,000 in year 2, $255,000 in year 3, and $375,000 in year 4, what is the project’s payback? If the firm’s hurdle payback rate were 3.5 years, would you accept the project? What is the project’s profitability index (cost of capital = 13%)? Based on this, would you accept the project?

Reference no: EM131351636

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