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What is the profitability index

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Question - Your firm is currently capital constrained, and your division manager wants to expand operations into a neighboring city. She projects that this will cost $385,000 up front and will generate $100,000 per year of free cash flow (after tax) over the next 10 years. If the project discount rate is 11%, what is the profitability index (PI)?

Reference no: EM132953155

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