A project with an initial investment of $90,000 and a profitability index of 1.510 also has an internal rate of return of 10%. The present value of the net cash flows is:
profitability index= present value of the net cash flow/initial investment
Hence present value of the net cash flow=(1.510*90000)
which is equal to
=$135,900
A project with an initial investment of $90,000 and a profitability index of 1.510 also has...
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