A project will cost $1.8 million. The company uses a 12% discount rate as a threshold for accepting capital projects. It is expected to have a 5 year life and return the following:
Year 1 $350,000
Year 2 $500,000
Year 3 $600,000
Year 4 $800,000
Year 5 $500,000
Calculate the Profitability Index
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