What is the profitability index of project

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Safi's Gluten-free bakery is thinking of buying a hybrid electric vehicle that will allow them to deliver fresh hot baked goods for $47,000. The vehicle is expected to save the company money in gas and earn an extra profit totaling $9,500 per year for 8 years. After that, the car will need to be replaced. Their current cost of capital is 5%. What is the profitability index of this project?

Reference no: EM132061934

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