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Could anyone explain why a Profitability Index may lead to inaccurate decisions when comparing mutually exclusive...

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Finance

Could anyone explain why a Profitability Index may lead toinaccurate decisions when comparing mutually exclusive investments?Thanks

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FormulaProfitability index PIPresent value of future cash flows initial cash outflow 1Net Present Value Initial Cash outflow    See Answer
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Could anyone explain why a Profitability Index may lead toinaccurate decisions when comparing mutually exclusive investments?Thanks

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