Find the projects profitability index


Problem: Outlined below is the following project information:
                             
            Year    Cash Flow       
               0     ???          
               1     $29,000         
               2     $58,000                                                      
               3     $22,000
            
Required rate of return  10 %       

If the Payback Period (simple payback)  is exactly 2 years, what is the project’s Profitability Index?

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Finance Basics: Find the projects profitability index
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