Question
Filkin Fabric Company is considering the replacement of its old, fully depreciated knitting machine. Machine A which has a cost of $47,149.00, a 5-year expected
Filkin Fabric Company is considering the replacement of its old, fully depreciated knitting machine. Machine A which has a cost of $47,149.00, a 5-year expected life, and after-tax cash flows (labor savings and depreciation) of $75,000.00 per year. Assume that Wilkins's cost of capital is 10.0%. What is the Profitability Index (PI) of Machine A?
| 2.06 | ||
| 1.70 | ||
| 1.24 | ||
| 2.50 | ||
| 6.03 |
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Contemporary Economics An Applications Approach
Authors: Robert Carbaugh
8th Edition
1138652199, 978-1138652194
