Bailey Corporation 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: Machine C Initial Investment $250,000 Estimated life 10 years Salvage value $ 30,000 Estimated annual cash inflows $ 45,000 Estimated annual cash outflows $ 10,000

2. Calculate the net present value and profitability index for Machine C. Use an 8% discount rate.

3. Rank the investments based on net present value. Which machine would be chosen based on this calculation, Machine A, B, or C?

4. Rank the investments based on profitability index. Which machine would be chosen based on this calculation, Machine A, B, or C?

5. Which machine should be purchased based on all the information provided? Discuss your reasons why.