Riordan Manufacturing is considering an investment in new equipment that will produce equal annual cash flows of $52,000 for 8 years and has a net present value of $94,182. The initial investment is $247,000, the useful life is 8 years, and the equipment's salvage value after 8 years is $26,000. What is the equipment's profitability index? Round your answer to two decimal places. 6.56 1.38 4.75 1.81

Riordan Manufacturing is considering an investment in new equipment that will produce equal annual cash flows of $52,000 for 8 years and has a net present value of $94,182. The initial investment is $247,000, the useful life is 8 years, and the equipment's salvage value after 8 years is $26,000. What is the equipment's profitability index? Round your answer to two decimal places. 6.56 1.38 4.75 1.81

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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