Sheridan Corp. is considering purchasing one of two new diagnostic machines.

The following estimated data has been determined by management:

Machine $1$ Machine $2$

Initial cost

$$40,000$

$$50,000$

Estimated life

$5$ years

$5$ years

Salvage value

$$1,000$

$$1,400$

Estimated annual cash inflows

$$15,000$

$$19,800$

Estimated annual cash outflows

$$3,900$

$$6,950$

Click here to view the factor table.

Calculate the profitability index assuming an $5\%$ discount rate. $($For calculation purposes, use $5$ decimal plac table provided, e$.$g$.1\mathrm{.}25124$ and final answers to $3$ decimal places, e$.$g$.1\mathrm{.}251.)$

Profitability Index

Machine $1$

Machine $2$