Exercise 24-4 BAK Corp. is considering purchasing one of two new diagnostic machines. Either machine...
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Exercise 24-4 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 577,930 $189,700 Estimated life 8 years Salvage value 0 Estimated annual cash inflows $19,690 $39,800 Estimated annual cash outflows $4,980 $9,850 8 years 0 Click here to view the factor table. (For calculation purposes, use 5 decimal places as displayed in the factor table provided.) 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.) Machine A Machine B Net present value Profitability index Which machine should be purchased? should be purchased
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