Bell Manufacturing Inc. is considering the replacement of one of its old drill presses. Three alternative replacement presses are under consideration. The relevant cash flows associated with each are shown in the following table. The firms cost of capital is 15%.

	Machine A	Machine B	Machine C
Initial Investment	85,000 $	60,000 $	130,000 $
Year	Cash Inflows
1	18,000 $	12,000 $	50,000 $
2	18,000	14,000	30,000
3	18,000	16,000	20,000
4	18,000	18,000	20,000
5	18,000	20,000	20,000
6	18,000	25,000	30,000
7	18,000	-----	40,000
8	18,000	-----	50,000

a. Calculate the net present value (NPV) of each press.

b. Using NPV, evaluate the acceptability of each press.

c. Rank the presses from best to worst using NPV.

d. Calculate the profitability index (PI) for each press.

e. Rank the presses from best to worst using PI.