Bridgeport Corp. is considering purchasing one of two new diagnostic machines. Either machine would make it...
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Bridgeport 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 is not equipped to do. Estimates for each machine are as follows: Machine A Machine B Original cost $78,100 $190,000 Estimated life 8 years 8 years Salvage value 0 0 Estimated annual cash inflows $23,300 $39,800 Estimated annual cash outflows $4,850 $9,000 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 e.g. -45 or parentheses e.g. (45). For calculation purposes, use 5 decimal places as displayed in the factor table provided, e.g. 1.25124 and final answers to O decimal places, e.g. 5,275. Round profitability index answers to 3 decimal places, eg. 12.521.) Machine A Machine B Net present value $ $ Profitability index Machine A Machine B Original cost $78,100 $190,000 Estimated life 8 years 8 years Salvage value 0 0 Estimated annual cash inflows $23,300 $39,800 Estimated annual cash outflows $4,850 $9,000 Click here to view the factor table. Calculate the net present value and profitability index of each machine. Assume a 10% discount rate. Of the net present value is negative, use either a negative sign preceding the number eg.-45 or parentheses eg. (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 A Machine D Net present value Profitability index Which machine should be purchased? Bridgeport 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 is not equipped to do. Estimates for each machine are as follows: Machine A Machine B Original cost $78,100 $190,000 Estimated life 8 years 8 years Salvage value 0 0 Estimated annual cash inflows $23,300 $39,800 Estimated annual cash outflows $4,850 $9,000 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 e.g. -45 or parentheses e.g. (45). For calculation purposes, use 5 decimal places as displayed in the factor table provided, e.g. 1.25124 and final answers to O decimal places, e.g. 5,275. Round profitability index answers to 3 decimal places, eg. 12.521.) Machine A Machine B Net present value $ $ Profitability index Machine A Machine B Original cost $78,100 $190,000 Estimated life 8 years 8 years Salvage value 0 0 Estimated annual cash inflows $23,300 $39,800 Estimated annual cash outflows $4,850 $9,000 Click here to view the factor table. Calculate the net present value and profitability index of each machine. Assume a 10% discount rate. Of the net present value is negative, use either a negative sign preceding the number eg.-45 or parentheses eg. (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 A Machine D Net present value Profitability index Which machine should be purchased?
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Net Present Value NPV Present value of annual net cashflow Initial Cash out... View the full answer
Related Book For
Managerial Accounting Tools for business decision making
ISBN: 978-1118096895
6th Edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
Posted Date:
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