Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Whispering Winds Corp. is considering purchasing one of two new diagnostic machines. Either machine would make it possible for the company to bid on jobs
Whispering Winds 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 curently is not equipped to do. Estimates for each machine are as follows: ID Machine A Machine B Original cost $78,400 $190,300 Estimated life 8 years 8 years Salvage value 0 0 Estimated annual cash inflows $23.500 $39.900 Estimated annual cash outflows $4.950 $8.950 Click here to view the factor 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 e.g. (45). For calculation purposes, use 5 decimal places as displayed in the factor table provided, eg 1.25124 and final answers to 0 decimal places, eg. 5,275. Round profitability index answers to 3 decimal places, eg 12.521.) Machine B Machine A Senter a dollar amount rounded to 0 decimal Senter a dollar amount rounded to 0 decimal Net present value places places enter the index rounded to 3 decimal places enter the index rounded to 3 decimal places Profitabil ity index Which machine should be purchased? select a machine Save for Later
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started