Question: Given the following information and assuming straight-line depreciation to zero, what is the profitability index for this project? Initial investment = $75,000; life = 5

Given the following information and assuming straight-line depreciation to zero, what is the profitability index for this project? Initial investment = $75,000; life = 5 years; cost savings = $25,000 per year; salvage value = $10,000 in year 5; tax rate = 34%; discount rate = 13%.

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