Question 12 Tailor Corp. is considering purchasing one of two new diagnostic machines. The following estimated data has been determined by management: Machine 1 $40,550 5 years Initial cost Estimated life Salvage value Estimated annual cash inflows Estimated annual cash outflows Machine 2 $50,500 5 years $1,400 $20,000 $6,950 $1,050 $15,150 $4,000 Click here to view PV table. Calculate the profitability index assuming an 8% discount rate. (For calculation purposes, use 5 decimal places as displayed in the factor table provided, e.g. 1.25124 and final answers to 3 decimal places, e.g. 1.251.) Profitability Index Machine 1 Machine 2 Based on your answer, which project should the company choose? Machine 1