Cleaners, Inc. is considering purchasing equipment costing $30,000 with a 6-year useful life. The equipment will provide cost savings of $7,300 and will be depreciated straight-line over its useful life with no salvage value. Cleaners requires a 10% rate of return.

2

What is the approximate profitability index associated with this equipment?

		1.23
		1.03
		.73
		1.06