TLC Corp. is considering purchasing one of two new diagnostic machines. Either machine would make it possible for the company to bid on jobs that it currently is not equipped to do. Estimates for each machine are as follows:

		Machine A		Machine B
Original cost		$78,200		$190,400
Estimated life		8 years		8 years
Salvage value		0		0
Estimated annual cash inflows		$23,300		$40,500
Estimated annual cash outflows		$4,800		$8,900

Click here to view PV table. Calculate the net present value and profitability index of each machine. Assume a 10% discount rate. (If the net present value is negative, use either a negative sign preceding the number e.g. -45 or parentheses e.g. (45). For calculation purposes, use 5 decimal places as displayed in the factor table provided, e.g. 1.25124 and final answers to 0 decimal places, e.g. 5,275. Round profitability index answers to 3 decimal places, e.g. 12.521.)

		Machine A		Machine B
Net present value		$		$
Profitability index

Which machine should be purchased?

Machine AMachine B