Current Attempt in ProgressBAK Corp. is considering purchasing one of two new diagnostic machines. Either machine would make it possible for the company tobid on jobs that it currently isn't equipped to do, Estimates regarding each machine are provided below.Original costEstimated life iSalvage valueEstimated annual cash inflowsEstimated annual cash outflowsNet present valueMachine AProfitability index$78,300Which machine should be purchased?8 years$19,700$5,040Machine A0should be purchasedClick here to view the factor tableCalculate the net present value and profitability index of each machine. Assume a 9% discount rate. Of 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 O decimal places, s 125 andprofitability index to 2 decimal places, eg. 10.50. For calculation purposes, use 5 decimal places as displayed in the factor table provided)Machine B$185,0008 years0$39,900$9,850Machine B

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 $78,300 8 years 0 $19,700 $5.040 Machine B $185,000 8 years 0 $39,900 $9,850 Click here to view the factor table Calculate the net present value and profitability index of each machine. Assume a 9% discount rate. Of 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, s 125 and profitability index to 2 decimal places, eg 10.50. For calculation purposes, use 5 decimal places as displayed in the factor table provided)

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 $78,300 8 years 0 $19,700 $5.040 Machine B $185,000 8 years 0 $39,900 $9,850 Click here to view the factor table Calculate the net present value and profitability index of each machine. Assume a 9% discount rate. Of 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, s 125 and profitability index to 2 decimal places, eg 10.50. For calculation purposes, use 5 decimal places as displayed in the factor table provided)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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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 $ 77,500 $ 186,000 Estimated life 8 years 8 years Salvage value $ 19,500 $ 39,600 Estimated annual cash inflows $ 5,040 $ 9,800 Estimated annual cash outflows Click here to view the factor 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…