Question: Compute the PI statistic for Project X and note wh…
Compute the PI statistic for Project X and note whether the firm should accept or reject the project with the cash flows shown below if the appropriate cost of capital is 11 percent.
| Time: | 0 | 1 | 2 | 3 | 4 | 5 |
| Cash flow: | -83 | -83 | 0 | 108 | 83 | 58 |
11.00%, reject
12.40%, accept
25.71%, accept
10.29%, reject
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