. Comparing Alternatives. The Mohr Company is considering a new popper for one of its portable caramel popcorn stands. The analysis is narrowed to the "Bang" or the "Pow." Information on the two devices is:

Either device will do the job equally as well. Mohr uses a 16 percent cost of capital. Ignore taxes.
\section*{Required:}
1. Which machine has the higher NPV?
2. Using the profitability index, which machine is more attractive?
3. If Mohr has \(\$ 180,000\) to invest in popping machines, what should it do? Why?

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Purchase price. Annual cash inflows Salvage value in 5 years Useful life Bang $ 90,000 34,000 8,000 5 years Pow $ 60,000 24,000 5,000 5 years