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: The firm's cost of capital is 9%.

d.Calculate the profitability index (PI) for each press. e.Rank the presses from best to worst using PI.

Machine C $130,000 Initial investment (CF) Year (t) 1 2 3 Machine A Machine B $85,300 $59,700 Cash inflows (CFt) $18,500 $12,300 $18,500 $14,300 $18,500 $15,600 $18,500 $18,000 $18,500 $19,600 $18,500 $25,500 $18,500 $18,500 4 $50,500 $30,200 $20,400 $20,300 $19,700 $29,800 $39,800 $49,600 5 6 7 8