Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. bak corp. is considering purchasing one of two new

BAK Corp. is considering purchasing one of two new diagnostic machines. Either machine would make...

80.2K

Verified Solution

Question

Accounting

image

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. Original cost Estimated life Salvage value Estimated annual cash inflows Estimated annual cash outflows Machine A $75,700 8 years 0 Machine B $189,000 8 years 0 $39,800 $10,100 $19,800 $4,990 Click here to view PV table. 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 value Profitability index Which machine should be purchased? should be purchased. Machine A Machine B

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

Assume that the parent company acquires its subsidiary byexchanging 84,000 shares of its $2...

Accounting
Q

A fundamental assumption of administrative reformers in the late 1800s and early 1900s was that politics...

Operations Management
Q

Explain the process of reabsorption using the following structures. Tubular Lumen, Tubular cells, Tubular fluid, Peritubular fluid, Peritubular...

Medical Sciences
Q

 The idealized cross-section of a two-cell thin-walled wing box is shown below with the data...

Mechanical Engineering
Q

Case: Disability Insurance Claims Handling at InsureIT We consider the following business process for handling insurance claims...

General Management
Q

Read the following extract from World Hepatitis Day - July 28th and answer the question...

Biology
Q

13 The separation between two protons so that the electrostatic repulsive force acting on either...

Physics
Q

27 All of the following will increase the economy s potential output EXCEPT A an...

Basic Math
Q

Check my work Thompson Company completes these transactions and events during March of the current...

Accounting
Q

Medwig Corporation has a DSO of 34 days. The company averages $4,000 in sales each...

Accounting
Q

How do banks view liabilities and other debt when they are considering extending credit to...

Accounting
Q

1. MM's proposition I under no taxes implies that an issue of debt increases expected...

Finance