Tuesday, 11 February 2020

the owner of a number of gas stations is considering installing coffee machines in his gas

the owner of a number of gas stations is considering installing coffee machines in his gas station. it will close $290,000 to install the coffee machines, and they are expected to boost cash flows by $129,464 per year for their five-year working life. what must the cost of capital be if this investment has a profitability index of 1?

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