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A project has an initial outlay of $1,173. It has a single payoff at the end...

A project has an initial outlay of $1,173. It has a single payoff at the end of year 8 of $9,977. What is the profitability index (PI) of the project, if the company’s cost of capital is 6.73 percent? Round the answer to two decimal places.

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Answer #1
Profitability index (PI) of the project = Present value of cash inflows/Initial cash outlay
= $ 5,925.27 / $ 1,173.00
=   5.05
Working:
Present value of cash inflows = 9977*(1.0673^-8)
= $ 5,925.27
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