Crane Corp Is Considering Purchasing One Of Two New Processing Machines Either Machine Would Make It Possible For The 1 (19.89 KiB) Viewed 68 times
Crane Corp Is Considering Purchasing One Of Two New Processing Machines Either Machine Would Make It Possible For The 2 (22.13 KiB) Viewed 68 times
Crane Corp. is considering purchasing one of two new processing machines. Either machine would make it possible for the company to produce its products more efficiently than it is currently equipped to do. Estimates regarding each machine are provided below; Original cost Estimated life Machine A Machine B $112,600 $269,000 10 years 10 years Salvage value -0- -0- Estimated annual cash inflows $29,800 $60,600 Estimated annual cash outflows $7,600 $15.100
Crane Corp. did some further research and found one other possible machine that would produce the same type of production efficiencies. The information regarding Machine C is below: Machine $256,600 Original cost Estimated life 10 years $29,800 Salvage value Estimated annual cash inflows Estimated annual cash outflows $45,400 $10,100 Calculate the net present value and profitability index for Machine C. Use an 8% discount rate. (Round present value factor calculations to decimal places. c.9. 1.25124 and the final answer to 2 decimal places e.3.589.71. Enter negative amounts using either a negative sign preceding the number 4.3. -45.35 or parentheses e.g.(45.35).) Net present value $ Profitability index
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