What is the profitability index of project

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A company is considering a new inventory system that will cost $120,000.

The system is expected to generate positive cash flows over the next four years in the amounts of $35,000 in year 1, $55,000 in year 2, $65,000 in year 3, and $70,000 in year 4. The firm's required rate of return is 9%.

What is the profitability index (PI) of this project?

Reference no: EM132828194

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