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Question
We compute the profitability index of a capital budgeting proposal byA) multiplying the internal rate of return by the cost of capital.
B) dividing the present value of the annual after-tax cash flows by the cost of capital.
C) dividing the present value of the annual after-tax cash flows by the cash investment in the project.
D) multiplying the cash inflow by the internal rate of return.
Answer
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