a) Kensington, Inc. is considering an investment in new equipment that will produce equal annual cash flows of $90,000 for 6 years.The equipment's net present value is $31,950, its cost is $360,000, its useful life is 6 years, and its annual depreciation expense (no salvage value) is $60,000.What is the profitability index of this project?

• A
• :
• 3.6
• B
• :
• 4.0
• C
• :
• 1.1
• D
• :
• 2.8