12.4

BAK Corp. is considering purchasing one of two new diagnostic machines. Either machine would make it possible for the company to bid on jobs that it currently isn't equipped to do. Estimates regarding each machine are provided below MachineA Machine B $77,100 $181,000 8 years 0 $39.500 $9,840 Original cost Estimated life Salvage value Estimated annual cash inflows Estimated annual cash outflows B years $20,400 54.820 Click here to view PV table Calculate the net present value and profitability nde of each machine Assume a 9% discount rate or the net present lue s negative use either a negative s g preceding the number eg-45 or parentheses eg 45 to O decimal places, eg. 125 and profitability index to 2 decimal places, eg. 10.50. For calculation purposes, use 5 decimal places as displayed in the factor table provided.) Round answer or present walue MachineA Machine B Net present value Profitability index Which machine should be purchased? should be purchased