B&H,Inc.is currently considering an five-year project that has an initial outlay or cost of $220,000.The future cash inflows from its project for years 1 through 5 are the same at $50,000.B&H has a discount rate of 8%.Because of capital rationing (shortage of funds for financing) ,B&H wants to compute the profitability index (PI) for each project.What is the PI for B&H's current project?
A) About 0.91
B) About 1.00
C) About 1.19
D) About 1.39
Correct Answer:
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