Question
Tailor Corp. is considering purchasing one of two new diagnostic machines. The following estimated data has been determined by management: Machine 1Machine 2 Initial cost$41,000$50,550Estimated
Tailor Corp. is considering purchasing one of two new diagnostic machines.
The following estimated data has been determined by management:
Machine 1Machine 2Initial cost$41,000$50,550Estimated life5years5yearsSalvage value$1,180$1,450Estimated annual cash inflows$15,150$19,900Estimated annual cash outflows$3,900$7,100
Calculate the profitability index assuming a 9% discount rate
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Canadian Cases In Financial Accounting
Authors: Carol E. Dilworth, Joan E. D. Conrod
2nd Edition
256111405, 978-0256111408
