In calculating the "investment required" for the profitability index, the amount invested should not be reduced by any salvage recovered from the sale of old equipment.

Question

Quizplus · Accepted Answer

In calculating the "investment required" for the profitability index, the amount invested should indeed be reduced by any salvage value recovered from the sale of old equipment, as this effectively reduces the net investment needed for the new project.

In Calculating the "Investment Required" for the Profitability Index, the Amount