Villena Corporation is considering equipment that would require an investment of $66,000. In year 3, Villena assumes the equipment will require maintenance and repairs of $10,000. No other cash outflows would be involved. The company's discount rate is 4%. The present value of the cash inflows would be $85,140. The profitability index of the project is closest to: (ignore income taxes in this problem.) EXHIBIT 118-1 Present Value of $1 Periods 4% 5% 6% 7% 8% 9% 10% 11% 12% 13% 123 0.962 0.952 0,943 0.935 0.926 0.917 0.909 0.001 0.893 0.885 0.025 0.907 0.890 0.873 0.857 0.842 0.826 0.812 0.797 0.783 0.772 0.751 0.731 0.712 0.693 0.706 0.683 0.659 0.636 0.613 0.650 0.621 0.503 0.567 0.543 4 6 0.809 0.864 0.840 0.816 0.794 0.855 0.823 0.792 0.763 0.735 0.822 0.784 0.747 0.713 0.051 6 0.790 0.746 0.705 0.666 0.630 0.596 0.564 0.535 0.507 0.480 0.760 0.711 0.685 0.823 0.583 0.547 0.513 0.482 0.452 0.425 0.731 0.677 0.627 0.582 0.540 0.502 0.467 0.434 0.404 0.376 0.703 0.645 0.592 0.544 0.500 0.460 0.424 0.391 0.361 0.333 10 0.676 0.614 0.558 0.508 0.463 0.422 0.386 0.352 0.322 0.295 8 EXHIBIT 118-2 Present Value of an Annuity of $1 in Arrears; 41-a+al Periods 4% 5% 6% 7% 8% 9% 10% 11% 12% 13% 1 0.962 0.952 0.043 2 1.886 1.859 1.833 1.808 3 2.775 2.723 2.673 2.624 0.935 0.926 1.783 2.577 4 3.630 3.546 3.465 3.387 3.312 5 4.452 4.329 4.212 4.100 3.993 0.917 0.909 0.901 0.893 0.885 1.750 1.736 1.713 1.000 1.668 2.531 2487 2444 2402 2.361 3.240 3.170 3.102 3.037 2.974 3.890 3.791 3.696 3.605 3.517 6 5.242 5.076 4.917 4.767 4.623 7 6.002 5.786 5.582 5.389 5.206 6.733 6.463 6.210 5.971 5.747 4.486 4.355 4.231 4.111 3.998 5.033 4.808 4.712 4.564 4.423 5.535 5.335 5.148 4.968 4.799 9. 7.435 7.108 6.802 6.515 6.247 5.995 5.759 5.537 5.328 5.132 10 8.111 7.722 7.360 7.024 6.710 6418 6.145 5.889 5.650 5.426 O.225 012 .155 .107