Engineering Economy 7th Edition by Leland Blank ,Anthony Tarquin

Exercise 10

Determine the profitability index at 10% per year interest for a project that has a first cost of $200,000 in year 0 and $200,000 in year 2, an annual operating cost of $80,000 per year, revenue of $170,000 per year, and a salvage value of $60,000 after its 5-year life.