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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

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. Machine A Machine B Original cost $78,260 $180,400 Estimated life 8 years 8 years Salvage value 0 0 Estimated annual cash inflows $20,270 $39,510 Estimated annual cash outflows $5,080 $9,940 (Refer the below table)

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a. Calculate the net present value and profitability index of each machine. Assume a 9% discount rate.

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