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Dakota,Inc

question 92

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Dakota,Inc.is currently considering an eight-year project that has an initial outlay or cost of $140,000.The cash inflows from its project for years 1 through 8 are the same at $35,000.Dakota has a discount rate of 12%.Because there is a shortage of funds to finance all good projects,Dakota wants to compute the profitability index (PI) for each project.That way Dakota can get an idea as to which project might be a better choice.What is the PI for Dakota's current project?


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