Make the profitability index to equal

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Use the following information about Project Little League to answer the question.

Initial Outlay $118 million

Year 1 $85 million

Year 2 $52 million

Year 3 $31 million

Year 4 $94 million

Year 5 $85 million

The required rate of return is 17%.

If the firm wants to make the profitability index to equal to 1 for Project Little League, the initial outlay has to be:

  • $183.80 million
  • $218.92 million
  • $214.69 million
  • $118.00 million

Reference no: EM132499124

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