Click here to view the factor table.

Calculate the profitability index assuming an $10\%$ discount rate. $($For calculation purposes, use $5$ decimal places as displayed in the factor

table provided, e$.$g$.1\mathrm{.}25124$ and final answers to $3$ decimal places, e$.$g$.1\mathrm{.}251.)$

Profitability Index

Machine $1$

Machine $2$Whispering Winds Corp. is considering purchasing one of two new diagnostic machines.

The following estimated data has been determined by management:

Machine $1$

Machine $2$

Initial cost

$$40,600$

$$50,650$

Estimated life

$5$ years

$5$ years

Salvage value

$$1,080$

$$1,450$

Estimated annual cash inflows

$$15,150$

$$19,900$

Estimated annual cash outflows

$$4,050$

$$6,950$