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Machine A Machine B Original cost $78.200 $189,500 Estimated life 8 years 8 years Salvage value 0 0 Estimated annual cash inflows $22,500 $40,200 Estimated
Machine A Machine B Original cost $78.200 $189,500 Estimated life 8 years 8 years Salvage value 0 0 Estimated annual cash inflows $22,500 $40,200 Estimated annual cash outflows $4,900 $8,950 Click here to view the factor 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 eg.-45r parentheses eg. (45). For calculation purposes, use 5 decimal places as displayed in the factor table provided, eg. 1.25124 and final answers to O decimal places, eg. 5,275. Round profitability index answers to 3 decimal places, eg. 12.521.) Net present value $ Profitability index Machine A Which machine should be purchased? Machine B Machine B
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