A New Product Has Startup Costs of $338,200 and Projected

question 56

Multiple Choice

A new product has startup costs of $338,200 and projected cash flows of $102,000,$187,500,and $245,000 for Years 1 to 3,respectively.What is the profitability index given a 9 percent required return?

• A).71
• B).77
• C)1.16
• D)1.30
• E)1.41

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