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Tiara International wants to buy new industrial machine. The company has short listed the machines and conducted capital budgeting analysis. The result as per
Tiara International wants to buy new industrial machine. The company has short listed the machines and conducted capital budgeting analysis. The result as per below. Machine model Inoka Kashi Gorobin Keksu Selling price (RM) 125,000 110,000 250,000 86,000 Net Present Value (RM) 55,000 42,000 68,000 (12,500) Payback period (years) 2.5 3 3.5 4 Profitability Index 1.50 1.46 1.78 0.89 Based on the above information, assume this is independent project. If they were to finalize their decision based on profitability index, which machine(s) should the company buy?
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