Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

how do you compute (9%,8)? 2 chegg.com = Chegg Study Textbook Solutions Expert Q&A Study Pack Prad E124 BAK Corp. is considering purchasing one of

how do you compute (9%,8)?

image text in transcribed
2 chegg.com = Chegg Study Textbook Solutions Expert Q&A Study Pack Prad E124 BAK 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 isn't quipped to do. Estimates regarding each machine are provided below. Com and (LO Original cost Estimated life Salvage value Estimated annual cash inflows Estimated annual cash outflows Machine A Machine B $75,500 $180,000 8 years 8 years -0- $20,000 $40.000 $5,000 $10,000 Instructions Calculate the net present value and profitability index of each machine. Assume a 9 discount rate. Which machine should be purchased? a en 12-5 Bruno Corporation is involved in the business of injection molding of plasties. It is considering the purchase of a new computer-aided design and manufacturing machine for 30.000. The company believes that with this new machine it will improve productivity Show transcribed image text Expert Answer angeleyes answered this 13.490 answers Was this answer Machine A:- NPV = Present value of all cash inflows - Present value of cash outflows (20000 - 5000) * PVIFA ( 9 %, 8) - 75500 15000 * 5.534819 - 75500 83022 - 75500 S7522 Pis positive

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

More Books

Students also viewed these Accounting questions

Question

Decision Making in Groups Leadership in Meetings

Answered: 1 week ago