MENU
An organization is considering purchasing a new machine which will cost $600,000. The new machine will generate cost savings of $200,000 each year for five years. The cost of capital is 12%.
The profitability index (PI) for the investment in the new machine is:
Give your answer to one decimal place.
Suggested Answer: A
Get Premium CIMAPRO19-P02-1 Questions
as Interactive Web-Based Practice Test or PDF
Real Exam Format
Detailed Explanations
Instant Access
Get Your Practice Test
8 comments · newest first
RE
Regenia
12 months ago
I'm not sure about those numbers, seems too good to be true.
DA
Daniela
1 year ago
PI calculation shows it's 1.2, right?
LA
Latricia
1 year ago
Wait, how does the cost of capital affect this?
NI
Nieves
1 year ago
Totally agree, that's a solid return!
TE
Tegan
1 year ago
The cost savings are $200,000 per year.
BE
Beula
1 year ago
Running the tests right after a build makes a lot of sense to me. It's the best way to get fast feedback on the code changes and ensure they haven't introduced any regressions.
RU
Ruthann
1 year ago
Okay, let's see. I'm pretty sure the scripts are in the domain's bin directory, but I'm not sure which subdirectory specifically.
YU
Yuonne
1 year ago
I've got a good handle on MoV, so I think I can tackle this question. The key is understanding that MoV should be used to clarify information and guide decision-making, not just measure value at the end. I'm confident option C is the correct answer.