Bak Corp Is Considering Purchasing One Of Two New Diagnostic Machines Either Machine Would Make It Possible For The Co 1 (60.63 KiB) Viewed 10 times
Bak Corp Is Considering Purchasing One Of Two New Diagnostic Machines Either Machine Would Make It Possible For The Co 2 (34.28 KiB) Viewed 10 times
BAK 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 below. Original cost Estimated life Salvage value Estimated annual cash inflows Estimated annual cash outflows Net present value Machine A $78,200 Profitability index 8 years $19,800 $5,130 0 Machine A Click here to view the factor 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. 10.50. For calculation purposes, use 5 decimal places as displayed in the factor table provided.) 2995.81 5.5348 Machine B $182,000 8 years 0 $39,600 $10,180 Machine B -19165.60 5.53482
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, eg. 10.50. For calculation purposes, use 5 decimal places as displayed in the factor table provided.) Net present value Profitability index Machine A Which machine should be purchased? Machine A should be purchased. 2995.81 5.5348 Machine B -19165.60 5.53482
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