A project requires an initial investment of $66,000 and has a profitability index of 0.312. The present value of the future cash inflows from this investment is:

Question

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The profitability index is calculated as the present value of future cash inflows divided by the initial investment. With a profitability index of 0.312, the present value of future cash inflows is 0.312 times the initial investment of $66,000, which equals $20,592.

A Project Requires an Initial Investment of $66,000 and Has