WieyPLUs PLUS Kimmel, Accounting: Tools for Business Decision Making, Se FINANCI

Question

WieyPLUs PLUS Kimmel, Accounting: Tools for Business Decision Making, Se FINANCIAL AND MANAGERIAL ACCOUNT?NG ( ) ad, Study & Practice Gradebook ORION Open Assignment txercise 24-4 ter 24 1-1 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 bild on jobs that n currently isn't equipped to do. Estimates regarding each machine are provided below 1A Original cost Estimated ife Salvage value Estimated anmual cash inflows Estimated annual cash outflows 78,360$181,900 8 years 8 years $39,880 $20,170 $4,8so $4,850$10,100 Cick here to view the factor table (For calculation purposes, use 5 declmal places as displayed in the factor table provided.) Calculate the net present value and pro tablity index of each machine. Assume a 9% dscount rate (ir the net present valuela negative use either a negative sign preceding the number eg 45 or parentheses eg (s). Round answer for present value to o decimal places, e-g. 125 and profitability index to 2 decímal places, e-g. 10.50.) Net present value 75500 (13955) Profitability index 1.10 92 t1 Privesy Policy I2000-2018ichn Wley&Sons.Inc; All Rights Reserved. A Division of Jehn Wiley &.Semsinc Version 4 24.

Explanation / Answer

Calculate net present value

Net present value of machine A = (15320*5.53482)-78360 = 6433

Net present value of machine B = (29780*5.53482)-181900 = -17073

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