Cleaners, Inc $\quad$ $\quad$ $\quad$ $\quad$ $\quad$

question 76

Multiple Choice

Cleaners, Inc.is considering purchasing equipment costing $30,000 with a 6-year useful life.The equipment will provide cost savings of $7,300 and will be amortized using the straight-line method over its useful life with no salvage value.Cleaners, Inc.requires a 10% rate of return.What is the approximate profitability index associated with this equipment? $\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\text { Present Value of an Annuity of } 1$$\begin{array}{llcc}\underline{\text { Period }} &\underline{8 \%}&\underline{9 \%} & \underline{10 \%}&\underline{11 \%} &\underline{12 \%}& \underline{15 \%}\\6&4.623&4.486&4.355&4.231&4.111&3.784\end{array}$

• A)1.23
• B)1.03
• C)1.06
• D)73

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Definitions:

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Individuals who choose to not work outside the home in order to focus on caring for their children and managing their household.

Positive Effect

The beneficial impact or positive outcome resulting from a particular action, behavior, or policy.

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The transmission of physical or mental traits through genes from one generation to the next.

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The effect that the social group individuals belong to has on their attitudes, behaviors, and beliefs.