What is the present worth index

Reference no: EM132164966

Question: A new milling machine with an 8-year life will cost Brake-O-Mastic $48,000. Net revenues for the 8 years are $12K, $14K, $15K, $16K, $10K, $8K, $8K, and $6K. The machine has an expected salvage value of $7500. Brake-O-Mastic uses a present worth index that divides the PW of all future net revenues by the initial cost. If money costs Brake-O-Mastic 12%, what is the present worth index?

Reference no: EM132164966

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