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A capital investment project has total installed cost of $25 million and a terminal value of...

A capital investment project has total installed cost of $25 million and a terminal value of $16 million at the end of its 10-year life. The project is expected to generate $5 million in net cash flows after tax each year. The firm’s marginal tax rate is 40 percent, and its cost of capital is 7 percent. Calculate the profitability index of this project.

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jeff jeffy answered 2 years ago
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