60BAK Corp. is considering purchasing one of two new diagnostic machines.
in Business (Education) by vomms
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Description
60BAK 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.
Machine A
Machine B
Original cost
78,320
181,100
Estimated life
8 years
8 years
Salvage value
0
0
Estimated annual cash inflows
20,110
40,280
Estimated annual cash outflows
4,860
10,200
a.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. .)
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Published On:
08/14/2014
Print Length:
3 page(s)
Word Count:
290
File Name:
60bak-corp-is-considering-purchasing-one-of-two-new-diagnostic-machines-17.docx
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59.65 KB (0.06 MB)
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