5 -0- 1 E26-4 Compute net present value and profitability index 2 BAK Corp. is considering purchasing one of two new diagnostic machines. Either machine would 3 make it possible for the company to bid on jobs that it currently isnt equipped to do. Estimates regarding each machine are provided below. Machine A Machine B Original cost $75,500 $180,000 Estimated life 8 years 8 years Salvage value -0- Estimated annual cash inflows $20,000 $40,000 20 Estimated annual cash outflows $5,000 $10,000 11 12 Instructions 13 Calculate the net present value and profitability index of each machine. Assume a 9% discount rate 24 Which machine should be purchased? 15 NOTE: Enter a number in cells requesting a value; enter either a number or a formula in cells with a "?". 16