Wildhorse 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 isn$$t equipped to do$.$ Estimates regarding each machine are provided here.

Machine A Machine B

Original cost $$78,300$ $$185,000$

Estimated life $8$ years $8$ years

Salvage value $00$

Estimated annual cash inflows $$19,700$ $$39,900$

Estimated annual cash outflows $$5,040$ $$9,850$

Click here to view PV table.

Calculate the net present value and profitability index of each machine. Assume a $9\%$ discount rate. $($If the net present value is negative, use either a negative sign preceding the number eg $-45$ or parentheses eg $(45).$ Round answer for present value to $0$ decimal places, e$.$g$.125$ and profitability index to $2$ decimal places, e$.$g$.10\mathrm{.}50.$ For calculation purposes, use $5$ decimal places as displayed in the factor table provided.$)$

Machine A Machine B

Net present value enter a dollar amount rounded to $0$ decimal places

enter a dollar amount rounded to $0$ decimal places

Profitability index enter the profitability index rounded to $2$ decimal places

enter the profitability index rounded to $2$ decimal places

Which machine should be purchased?

select a machine

should be purchased.