Net Present Vatue Method and Present Value Index Diamond \&. Fuat the. is consaderng an investment in ane of two machines. The seweng machine will increase productivity fram sewing iso bsseballs per hour to iewmg 290 per hour. The conthitution margin per unit is 50.32 per basebili. Assume that any increased production of basebals can be sold. The second machine is an automatic packing machine for the goy ball fine. The packing mactiene will reduce packeng labor cost. The labor cost saved is equivalent to $21 per hour. The sewing machine wil cost $260, 000 , have an eight year Me, and will operate for 1,800 hours per yeac The packing machune will cost 585,000 , have an eight year He, ahd will operdte for 1,400 hours per ywas, piamond R Turf seeks a manimum rate of return of 15% on ats investments. b. Deternune the present value index for the two machines, Round to two decimal places. 6. If Diamond \& Turf has suiticient funds for only one of the machines und qualitative factors are equal between the two machines, in which. machine should it invest? Itestas F Ched My wak 9. First determune the annual net cash fow for each machine. For the swing machine, multiply the hours by the incremental baseballs by the contributon margin per baseball- for the packing machine, mulbply the hours by the labor cost saved. Next, multiply the annual net cash flow for each machine by the present value of an annuity factor for 8 peniods at 15%, refer bxhibit 5 in the text. Subtroct the amount to be invested. b. Dride the total present value of the net caih flow by the amount to be inverted