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...


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

Machine B
Original cost$78,200$182,000
Estimated life8 years8 years
Salvage value00
Estimated annual cash inflows$19,800$39,600
Estimated annual cash outflows$5,130

$10,180





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 places, e.g. 10.50. For calculation purposes, use 5 decimal places as displayed in the factor table provided.)


































Machine A

Machine B
Net present valueenter a dollar amount rounded to 0 decimal placesenter a dollar amount rounded to 0 decimal places
Profitability indexenter the profitability index rounded to 2 decimal placesenter the profitability index rounded to 2 decimal places




Jun 08, 2022
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