What is the investment profitability index

Reference no: EM131793968

Question: Your firm is considering an investment that will cost $950,000 today. The investment will produce cash flows of $400,000 in year 1, $250,000 in years 2, 3 and 4, $200,000 in year 5 and $250,000 in year 6. The discount rate that your firm uses for projects of this type is 12%. What is the investment's profitability index?

Reference no: EM131793968

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