Question: Exercise 24-4 Your answer is partially correct. Try again BAK Corp, is considering purchasing one of two new diagnostic machines. Either machine would make it

Exercise 24-4 Your answer is partially correct. Try again 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 Machine A $76,100 8 years 0 19,900 5,140 Machine B $184,000 8 years Original cost Estimated life Salvage value Estimated annual cash inflows Estimated annual cash outflows $40,300 10,130 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 paces, e.g. 10.50. For calculation purposes, use 5 decimal places as displayed in the factor table provided.,) Machine A Machine B Net present value 5594 17015 Profitability index
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
