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ABC Corporation is experiencing hard capital rationing and will not be able to invest more than $1,000,000 this year. Develop a profitability index for the following four projects and indicate which projects will be accepted. All four projects will last 3 years and the firm uses a 10% discount rate.
Daily Balance
A method of calculating interest where the amount owed or due is recalculated each day, based on the balance of the account at the end of each day.
Borrowed
Refers to money or goods taken on loan with the obligation to return it or pay it back, usually with interest, within a specified period.
Amount Owed
The total sum of money that is due or required to be paid to another party.
Interest Rate
The fraction of a monetary sum levied for the privilege of utilizing it, often indicated as a percentage per annum.
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