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2.5 points Durley Company plans to buy a new machine for $60,000 that will have an estimated useful life of 3 years and no salvage value. The expected cash inflow is $24,000 annually. Durley Company has a cost of capital of 12 %. Given that the present value of $1 after 3 periods at 12 % is 0.71178, and the present value of an annuity for 3 periods at 12% is 2.40183 , the profitability index is:   0.28 0.04 0.96 1.04 1.96

2.5 points Durley Company plans to buy a new machine for $60,000 that will have an estimated useful life of 3 years and no salvage value. The expected cash inflow is $24,000 annually. Durley Company has a cost of capital of 12 %. Given that the present value of $1 after 3 periods at 12 % is 0.71178, and the present value of an annuity for 3 periods at 12% is 2.40183 , the profitability index is:   0.28 0.04 0.96 1.04 1.96

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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2.5 points Durley Company plans to buy a new machine for $60,000 that will have an estimated useful life of 3 years and no salvage value. The expected cash inflow is $24,000 annually. Durley Company has a cost of capital of 12 %. Given that the present value of $1 after 3 periods at 12 % is 0.71178, and the present value of an annuity for 3 periods at 12% is 2.40183 , the profitability index is:

 

0.28

0.04

0.96

1.04

1.96

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