Angler Corp. is considering purchasing one of two new processing machines. Either machine would make it possible for the company to produce its products more efficiently than it is currently equipped to do. Estimates regarding each machine are provided below: Original cost Estimated life Salvage value Estimated annual cash inflows Estimated annual cash outflows Machine A $113,250 10 years -0- $30,000 $ 7,500 Machine B $270,000 10 years -0- $60,000 $15,000 Instructions (a) Calculate the net present value and profitability index of each machine. Assume an 8% discount rate. Which machine should be purchased? (b) Angler Corp. did some further research and found one other possible machine that would produce the same type of production efficiencies. The information regarding Machine C is below: Original cost Estimated life Salvage value Estimated annual cash inflows Estimated annual cash outflows Machine C $250,000 10 years $ 30,000 $ 45,000 $ 10,000 (1) Calculate the net present value and profitability index for Machine C. Use an 8% discount rate. (2) Rank the investments based on net present value. Which machine would be chosen based on this calculation? (3) Rank the investments based on profitability index. Which machine would be chosen based on this calculation? (4) Which machine should be purchased based on all the information provided? Discuss your reasons why. TABLE 1 Future Value of 1 Pelods 9% 1 1.04000 1.08160 1.12486 1.16986 1.21665 1.26532 1.31593 1.36857 1.42031 1.48024 1.50945 1.60103 1.66507 1.73168 1.80094 5% 1.05000 110250 1.15763 1.21551 1.27628 1 24010 140710 147746 1. 000 1.12360 1.19102 1.26248 133823 1.41852 1.50363 1.59385 1.699.48 1.790RS 1.62889 10% 1.000 1.09000 1. 10000 1.166401.18810 .25971 1.29503 1.33100 1360.09 1.41158 1.45410 1.4003 1.51862 1.61051 1.5867 167710 1.77156 1.713.82 1.82804 1.96872 1.85093 199256 21435 1.99900 2.17199 235795 215892 2.36736 2.59374 223164 258043 285312 251817 2.81267 313843 2.71962 3.06581 3.45227 293719 3.34173 3.7975 3.17217 4.17725 3.47504 3.97031 4.59497 3.70002 4.32763 S.O547 3.9 m2 4.71712 5.55992 431570 5.14156 61159L 4.66096 5.604416,72750 15% 1.11000 1.12000 122210 1.15000 12514 1.32250 1.51807 1.52083 1.57a 1.74901 1.68506 1.76234 2.01136 1.87041 1.97382 231306 2.07616 2.21068 2.66002 230454 2.47595 3.0592 2.55803 2.77308 3.51788 2.839.2 3.10585 404556 315176 3.47855 465239 3.49845 3.89598 5.15ons 3. 328 4.36349 6.15279 4.31014 4 8711 7.00571 4.78459 547357 813706 531089 6.13039 9:35762 5.895096 86604 10.76125 6.54355 7.68997 1 237545 726334 8.61276 14.23177 R062319.646291618654 1.71034 1.79586 LER565 1.97993 207893 1.99830 2.01220 2.12293 2.26090 2.39656 364248 1.94790 2.02582 2106R5 219112 218287 229212 2.29202 2.40662 252695 2.65330 2.54035 2.69277 2 85434 3.02560 320714 TABLE 2 Future Value of an Annuity of 1 Periods 5 11% 15% 1.00000 1.00000 206000 3.18360 437462 3763709 6.97532 8.39384 9.89747 11.49132 13.18079 100000 204000 2.05000 3.12160 3.15250 4.24646 4.31013 5.41632 5.52563 6.63298 6.80191 780829 R14201 9.21423 9.54911 10.58280 11.02656 12.00611 12.57789 13.48.635 14.20679 15.02581 15.91713 16.62684 17.71298 18.29191 19,59863 20.02359 21.57856 21.82453 23.65749 23.69751 25.84037 25.6454128.13238 2767123 30.51900 29.77 23.06595 9% 1.000.00 1.00000 2.0 2.00000 3.24640 3.27810 450611 4.57313 5.86660 5.98471 7.33592 7.52334 8922809.20044 10.63663 11.02847 1248756 13.02104 14.48656 15.19293 1666549 17.56029 1897713 2014072 21.49530 22.95339 2421492 26.01919 27.15211 29.36092 30.32428 33.003.40 33.7502336.97351 37.45024 41.30134 41.44626 46.01 8.46 45.76196 51.16012 10% 12% 1.00000 1.00000 1.000.00 2.10000 2.11000 212000 3.31000 3.3210 3.37440 4.64100 4.70973 4.77983 6.10510 6.22780 6.35285 7.715617.91286 8.11519 948717 9.78327 1008001 1143699 11.85943 1220969 13.57948 14.16397 14.77566 15.93743 16.72201 175.4874 18.53117 19.56143 20.65458 21.38428 22.71319 2413313 2452271 26.21164 2802911 27.97498 30.09492 32.39260 31.77248 34.40536 37.27972 35.91973 39.18995 42.75328 40.54470 44.50084 48.88367 45.59917 50.3959355.74972 SL.19909 56.93949 63.43968 57.27500 6420283 72.05244 1.00000 2.15000 3.47250 4.99338 6.74238 8.75374 11.06680 13.72682 16.78584 20.30372 24.34928 29.00167 34.35192 40.50471 47.58041 55.71747 65.07509 7 5.83636 88.21181 1021358 14.97164 16,86994 18.88214 21.01 507 23.27597 25.67253 28.21288 30.90565 33.75999 3678559 15 20 TABLE 3 Present Value of 1 Perles 96154 5% 95238 90703 .86384 94340 89000 92593 91743 ,8416 90090 12% 9786 7933 .73503 .79209 .74726 .78353 .73119 .70813 .64993 6575 88900 5480 32193 .79031 75992 73069 -70259 67556 .63552 56743 49718 .74622 .71068 67684 .64461 101 70496 66506 .62741 59190 .55839 .63012 58349 54027 S0005 45235 4029 32690 35218 -32197 35040 31863 31728 21494 .18691 25751 .6.1958 .62460 .60057 57748 55526 51191 51337 49363 .47464 45639 .59627 54203 .50187 46043 42341 38753 35554 32618 29925 27454 25187 20107 21100 19449 17813 58468 55684 51032 50507 .48102 45811 43650 41552 30573 37689 .26333 21939 .52579 49997 46884 44210 41727 39365 37136 35034 33051 31180 42883 39711 36770 3.0046 31524 29189 .27027 20900 122.99 .10657 09293 21763 .19785 17986 .16351 14864 2502 09 16963 152 13768 12.403 23171 1455 16312 14564 13004 11611 10357 2 0707 6110 TABLE 4 Present Value of an Annuity of 1 e re of Canal Dayments Periods 96154 L88509 277509 3.62090 445182 5% 95238 1.85941 272025 3254595 4.329.48 5.075.99 5.78607 6.46321 7410782 7.72173 6% 043.40 1.83339 2.67301 3.46511 4.21236 92593 1.78326 2 57710 3.31213 3.99271 9% 9 1743 1.75911 2.53130 3.28972 3.88965 10% 9 0909 1.73554 249685 3.16986 3.79079 11% 90000 1.71252 2.44371 3.10045 3.69590 12% 926 1.69005 2 40183 3.03735 3.60478 15% 6957 1.62571 228323 285498 3.35216 524214 6.00205 6.73274 741533 811090 4.48592 5.03295 5.5242 5.99525 6.41766 435526 4.86842 533493 5.75902 6.14457 876048 9.38507 9.98565 10.563,12 11.11839 8.30601 8.86325 9.19357 9.89864 1037966 491732 4.62288 5.58238 5.20637 6.20979 5.74664 6.801696 .24689 7.15009 6.71008 7.687 713996 838384 753608 RS268 7.90378 9.29498 8.24424 9.71225 8.55918 10.105908.85137 8.85137 10.47726 9 12164 10.82760 9.37189 11.15812 9.60360 11.46992981815 6.49506 6.81369 7.10336 7.36669 7.60608 423054 4.71220 5.14612 5.53705 5.88923 6.20652 6.49236 6.74987 6.98187 7.19087 7 37916 7.54879 7.70162 783979 706333 4.11141 3.78448 4.56376 416042 496764 449732 532825 477158 5.680225.01877 5.93770 5.23371 619437 S.42062 6.42255 5.58315 6.62817 5.72448 6.81086 5.84737 697399 5.95424 7.11963 6.04716 724967 6.12797 736578 6.1962 746944 6.25983 6.80519 7.16073 7.48690 7.78515 8.06069 8.31256 R$41363 8 75563 8.75563 R9S012 9.12855 Is 11.65230 10.83777 1216567 11.27407 1265930 11.68959 13.13394 12 08532 1 3.590331246221 17 19 20 7.82371 8.02155 8.20141 192 _51356 R