Answered step by step
Verified Expert Solution
Question
1 Approved Answer
BAK Corp. is considering purchasing one of two new diagnostic machines. Either machine would make it possible for the company to Bd 8 juu that
BAK Corp. is considering purchasing one of two new diagnostic machines. Either machine would make it possible for the company to Bd 8 juu that it currently isn't equipped to do. Estimates regarding each machine are provided below. Machine A Machine B Original cost $77,500 $186,000 Estimated life 8 years 8 years Salvage value Estimated annual cash inflows $19,500 $39,600 Estimated annual cash outflows $5,040 $9,800 Click here to view PV table. Calculate the net present value and profitability index of each machine. Assume a 9% discount rate. (If the net present value is negative, use either a negative sign preceding the number eg45 or parentheses eg (45). Round answer for present value to 0 decimal places, e.g. 125 and profitability index to 2 decimal places, e.g. 10.50. For calaulation purposes, use 5 decimal places as displayed in the factor table provided.) Machine B Machine A Net present value Profitability index Which machine should be purchased? 1219 PM 11/30/2015
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started