Current Attempt in Progress Concord Co. is considering purchasing equipment that has an initial investment of $45000. The company's required rate of return is 12%. Annual cost savings are projected to be $18000 for year 1, $15000 for year 2, and $10000 for year 3. What is the investment's profitability index? Present Value Year of 1 at 12% PV of an Annuity of 1 at 12% 1 0.893 0.893 2 0.797 1.690 3 0.712 2.402 O 1.78. O 0.78. O 1.74. O 1.72. M

FINANCIAL ACCOUNTING
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Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Current Attempt in Progress
Concord Co. is considering purchasing equipment that has an initial investment of $45000. The company's required rate of return is
12%. Annual cost savings are projected to be $18000 for year 1, $15000 for year 2, and $10000 for year 3. What is the investment's
profitability index?
Present Value
Year
of 1 at 12%
PV of an Annuity
of 1 at 12%
1
0.893
0.893
2
0.797
1.690
3
0.712
2.402
O 1.78.
O 0.78.
O 1.74.
O 1.72.
M
Transcribed Image Text:Current Attempt in Progress Concord Co. is considering purchasing equipment that has an initial investment of $45000. The company's required rate of return is 12%. Annual cost savings are projected to be $18000 for year 1, $15000 for year 2, and $10000 for year 3. What is the investment's profitability index? Present Value Year of 1 at 12% PV of an Annuity of 1 at 12% 1 0.893 0.893 2 0.797 1.690 3 0.712 2.402 O 1.78. O 0.78. O 1.74. O 1.72. M
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