Using the profitability index when evaluating projects

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Reference no: EM131605828

Gold Mining, Inc. is using the profitability index (PI) when evaluating projects. Gold Mining’s cost of capital is 8.52 percent. What is the PI of a project if the initial costs are $1,766,700 and the project life is estimated as 6 years? The project will produce the same after-tax cash inflows of $606,327 per year at the end of the year. Round the answer to two decimal places.

Reference no: EM131605828

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