Hook Industries is considering the replacement of one of its old metal stamping machines. Three alternative replacement machines are under consideration. The relevant cash flows associated with each are shown in the following table:

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. The firm's cost of capital is

1010%.

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

Initial investment	84500	60100	130400
Year
1	18200	12100	49900
2	18200	13700	30200
3	18200	15500	19800
4	18200	18400	19500
5	18200	19700	19800
6	18200	24500	29800
7	18200	0	39800
8	18200	0	50300