Question: (PI) Callihan Carpets is interested in purchasing a computer and software that would allow its salespeople to demonstrate to customers how a finished carpet installation

(PI) Callihan Carpets is interested in purchasing a computer and software that would allow its salespeople to demonstrate to customers how a finished carpet installation would appear. Managers have estimated the cost of the computer, software, and peripheral equipment to be $12,000. Based on this cost, the man¬ agers have determined that the net present value of the investment is $3,000. Compute the profitability index of the investment (ignore tax).

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