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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 $76,900 8 years Machine B 186,000 8 years Original cost Estimsted life Salvage value Estimated annual eash inflows Estimated annual cash outflows $19,600 5,150 $39,800 10,080 Calculate the net present value and profitability index o each machine. Assume a 9% discount rate. If the net present value 1s negative, use ether a negatv e sign prece ing the number eg-45 or parentheses eg decimal places, e.g. 125 and profitability index to 2 decinmal places, e.g. 10.50. For calculation purposes, use 5 decimal places as displayed m the factor table provided.) 45 Round answer or present value to 0 Machine A Machine B Net present value Profitability index Which machine should be purchased? should be purchased
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