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ASAP please Tailor Corp. is considering purchasing one of two new diagnostic machines. The following estimated data has been determined by management: Machine 1 Machine
ASAP please
Tailor Corp. is considering purchasing one of two new diagnostic machines. The following estimated data has been determined by management: Machine 1 Machine 2 Initial cost $40,000 $50,000 Estimated life 5 years 5 years Salvage value $1,000 $1,400 Estimated annual cash inflows $15,000 $19,800 Estimated annual cash outflows $3,900 $6,950 Click here to view PV table. Calculate the profitability index assuming a 5% discount rate. (For calculation purposes, use 5 table provided, eg. 1.25124 and final answers to 3 decimal places, e.g. 1.251.) Profitability Index Machine 1 Machine 2 Based on your answer, which project should the company chooseStep by Step Solution
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