Blossom 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 isnt equipped to do. Estimates regarding each machine are provided here.

		Machine A		Machine B
Original cost		$74,000		$179,000
Estimated life		8 years		8 years
Salvage value		0		0
Estimated annual cash inflows		$19,500		$39,500
Estimated annual cash outflows		$4,800		$9,800

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

		Machine A		Machine B
Net present value
Profitability index

Which machine should be purchased?