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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
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 Estimated life $77,800 $189.500 Byears Byears Salvage value 0 D Estimated annual cash inflows $24.900 $40.200 Estimated annual cash outflowS $5,200 58.850 Calculate the net present value and profitability index of each machine. Assume a 10% discount rate of the net present value is negative, use either a negative sign preceding the number eg 45 or parentheses eg (451 For calculation purposes, use 5 decimal places as displayed in The factor table provided eg 1.25124 and final answers to O decimal places, eg 5.275. Round profitability index answers to 3 decimal places 312521 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 eg-45 or parentheses eg (45). For calculation purposes, use 5 decimal places as displayed in the factor table provided, eg 125124 and final answers to O decimal places, eg 5.275. Round profitability index answers to 3 decimal places es 125213 Net present value Profitability index 15 Machine A Machine B S Which machine should be purchased Textbook and Media
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