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Calculate the Present Value Index for a capital budget proposal. Initial Equipment Cost: $4,000,000 Salvage Value: $75,000 Setup Costs: $55,000 Training Costs: $20,000 Annual maintenance costs: $28,000 Anticipated annual savings: $400,000 Annual labor savings: $38,000 Expected useful life in years: 9 Overhaul costs in year 4: $45,000 Annual operating costs: $25,000 Hurdle rate: 8%. Please show your formulas.

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Financial Management, Finance

Category:- Financial Management
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