NPV- Mutually exclusive projects

(there are a total of 15 parts to this question)

Hook Industries is considering the replacement of one of its old metal stamping machines. Three alternative replacement machines are under consideration. The cash flows associated with each are shown in the following table in the pocture below. The firm's cost of capital is 15%.

a. Calculate the net present value (MPV) 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.

\begin{tabular}{cccc} \hline & Machine A & Machine B & Machine C \\ \cline { 2 - 4 } Initial investment (CF0) & $84,600 & $60,100 & $130,400 \\ \hline Year (t) & & Cash inflows (CFt) \\ \hline 1 & $18,400 & $12,000 & $49,600 \\ 2 & $18,400 & $14,400 & $30,100 \\ 3 & $18,400 & $16,000 & $20,400 \\ 4 & $18,400 & $17,700 & $20,400 \\ 5 & $18,400 & $19,700 & $20,100 \\ 6 & $18,400 & $24,800 & $30,000 \\ 7 & $18,400 & - & $40,500 \\ 8 & $18,400 & - & $49,500 \\ \hline \end{tabular}