C View Policies mpt in Progress TLC 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 is not equipped to do. Estimates for each machine are as follows: Machine A Machine B Original cost $78,400 $190,300 Estimated life 8 years 8 years Salvage value 0 0 Estimated annual cash inflows $22,000 $40,100 Estimated annual cash outflows $5,100 $8,800 Click here to view PV table. Calculate the net present value and profitability index of each machine. Assume a 10% discount rate. (If the net present value is negative, use either a negative sign preceding the number e.g. -45 or parentheses e.g. (45). For calculation purposes, use 5 decimal places as displayed in the factor table provided, e.g. 1.25124 and final answers to O decimal places, e.g. 5,275. Round profitability index answers to 3 decimal places, e.g. 12.521.)Kendra Corporation is involved in the business of injection moulding of plastics. It is considering the purchase of a new computer aided design and manufacturing machine for $425,100. The company believes that with this new machine it will improve productivity and increase quality, resulting in a $100,900 increase in net annual cash ows for the next ve years. Management requires a 10% rate of return on all new investments. Click here to view PV table. Calculate the internal rate of return on this new machine. (Round answer to 0 decimal places, e.g. 10%. For calculation purposes, use 5 decimal places as displayed in the factor table provided, e.g. 1.52124.) Internal rate of return % Should management accept the investment? The investment c ' be accepted. Calculate the net present value and profitability index of each machine. Assume a 10% discount rate. (If the net present value is negative, use either a negative sign preceding the number e.g. -45 or parentheses e.g. (45). For calculation purposes, use 5 decimal places as displayed in the factor table provided, e.g. 1.25124 and final answers to O decimal places, e.g. 5,275. Round profitability index answers to 3 decimal places, e.g. 12.521.) Machine A Machine B Net present value $ $ Profitability index Which machine should be purchased?Mega Company is considering the purchase of a new machine. The invoice price of the machine is $84,000, freight charges are estimated to be $4,000, and installation costs are expected to be $5,600. The annual cost savings are expected to be $20,000 for 10 years. Calculate the cash payback period. (Round answer to 2 decimal places, e.g. 15.25.) Cash payback period years Indicate whether the following statements are true or false: 1. The process of making capital expenditure decisions is called capital budgeting. 2. Capital budgeting involves choosing among various capital projects to nd the one(s) that will maximize a company's return on its nancial investment. 3. At least once a month, proposals for projects are requested from each department. 4. The capital budget committee chooses the projects that they believe are the most worthy of funding. 5. Ultimately, the board of directors approve the capital expenditure budget. 6. For the purposes of capital budgeting, accrual accounting is the method used. 7. In capital budgeting, depreciation expense is added back to net income. 8. The availability of funds is an important consideration in capital budgeting. 9. Salvage value of equipment when the project is complete is considered irrelevant in capital budgeting. 10. The initial investment is an important consideration in capital budgeting. 4 (D (D 4} (D 4 (D 4 4D