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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   $76,000   $183,000   Estimated life   8 years   8 years   Salvage value   0   0   Estimated annual cash inflows   $20,000   $39,600   Estimated annual cash outflows   $5,140   $10,090   Click here to view the factor table.

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   $76,000   $183,000   Estimated life   8 years   8 years   Salvage value   0   0   Estimated annual cash inflows   $20,000   $39,600   Estimated annual cash outflows   $5,140   $10,090   Click here to view the factor table.

FINANCIAL ACCOUNTING
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   $76,000   $183,000  
Estimated life   8 years   8 years  
Salvage value   0   0  
Estimated annual cash inflows   $20,000   $39,600  
Estimated annual cash outflows   $5,140   $10,090  



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   enter a dollar amount rounded to 0 decimal places   enter a dollar amount rounded to 0 decimal places  
Profitability index   enter the profitability index rounded to 2 decimal places   enter the profitability index rounded to 2 decimal places  


Please calculate machine B using the correct table, I attached to the question as well

 
TABLE 1 Future Value of 1 (n) Periods 4% 5% 6% 7% 8% 9% 11% 15% 0 1.00000 1.00000 1.00000 1.06000 1.07000 1 1.15000 2 1.08160 1.12360 1.14490 3 1.32250 1.36763 1.40493 1.52088 1.51807 1.57352 1.74901 4 1.41158 1.46410 1.53862 1.61051 5 1.68506 1.76234 2.01136 2.31306 2.66002 10% 12% 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.04000 1.05000 1.08000 1.09000 1.10000 1.11000 1.12000 1.10250 1.16640 1.18810 1.21000 1.23210 1.25440 1.12486 1.15763 1.19102 1.22504 1.25971 1.29503 1.33100 1.16986 1.21551 1.26248 1.31080 1.36049 1.21665 1.27628 1.33823 1.40255 1.46933 1.26532 1.34010 1.41852 1.50073 1.58687 1.67710 1.77156 1.87041 1.97382 1.31593 1.40710 1.50363 1.60578 1.71382 1.82804 1.94872 2.07616 2.21068 1.36857 1.47746 1.59385 1.71819 1.85093 1.99256 2.14359 2.30454 2.47596 1.42331 1.55133 1.68948 1.83846 1.99900 2.17189 2.35795 2.55803 2.77308 1.48024 1.62889 1.79085 1.96715 2.15892 2.36736 2.59374 2.83942 3.10585 1.53945 1.71034 1.89830 2.10485 2.33164 2.58043 2.85312 3.15176 3.47855 1.60103 1.79586 2.01220 2.25219 2.51817 2.81267 3.13843 3.49845 3.89598 5.35025 1.66507 1.88565 2.13293 2.40985 2.71962 3.06581 3.45227 3.88328 4.36349 6.15279 1.73168 1.97993 2.26090 2.57853 2.93719 3.34173 3.79750 4.31044 4.88711 7.07571 1.80094 2.07893 2.39656 2.75903 3.17217 3.64248 4.17725 4.78459 5.47357 1.87298 2.18287 2.54035 2.95216 3.42594 3.97031 4.59497 5.31089 6.13039 1.94790 2.29202 2.69277 3.15882 3.70002 4.32763 5.05447 5.89509 6.86604 2.02582 2.40662 2.85434 3.37993 3.99602 4.71712 5.55992 6.54355 7.68997 2.10685 2.52695 3.02560 3.61653 4.31570 5.14166 6.11591 7.26334 8.61276 14.23177 2.19112 2.65330 3.20714 3.86968 4.66096 5.60441 6.72750 8.06231 9.64629 16.36654 3.05902 3.51788 4.04556 10 11 4.65239 12 13 14 15 8.13706 16 9.35762 17 10.76126 18 12.37545 19 20 TABLE 2 Future Value of an Annuity of 1 (n) Payments 4% 10% 11% 12% 1 2 3 9 5% 6% 7% 8% 9% 15% 1.00000 1.00000 1.00000 1.0000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 2.04000 2.05000 2.06000 2.0700 2.08000 2.09000 2.10000 2.11000 2.12000 2.15000 3.12160 3.15250 3.18360 3.2149 3.24640 3.27810 3.31000 3.34210 3.37440 3.47250 4.24646 4.31013 4.37462 4.4399 4.50611 4.57313 4.64100 4.70973 4.77933 4.99338 5.41632 5.52563 5.63709 5.7507 5.86660 5.98471 6.10510 6.22780 6.35285 6.74238 6.63298 6.80191 6.97532 7.1533 7.33592 7.52334 7.71561 7.91286 8.11519 8.75374 7.89829 8.14201 8.39384 8.6540 8.92280 9.20044 9.48717 9.78327 10.08901 11.06680 9.21423 9.54911 9.89747 10.2598 10.63663 11.02847 11.43589 11.85943 12.29969 13.72682 10.58280 11.02656 11.49132 11.9780 12.48756 13.02104 13.57948 14.16397 14.77566 16.78584 12.00611 12.57789 13.18079 13.8164 14.48656 15.19293 15.93743 16.72201 17.54874 20.30372 13.48635 14.20679 14.97164 15.7836 16.64549 17.56029 18.53117 19.56143 20.65458 24.34928 12 15.02581 15.91713 16.86994 17.8885 18.97713 20.14072 21.38428 22.71319 24.13313 29.00167 16.62684 17.71298 18.88214 20.1406 21.49530 22.95339 24.52271 26.21164 28.02911 34.35192 18.29191 19.59863 21.01507 22.5505 24.21492 26.01919 27.97498 30.09492 32.39260 40.50471 20.02359 21.57856 23.27597 25.1290 27.15211 29.36092 31.77248 21.82453 23.65749 25.67253 27.8881 30.32428 33.00340 35.94973 39.18995 42.75328 55.71747 23.69751 25.84037 28.21288 30.8402 33.75023 36.97351 40.54470 44.50084 48.88367 65.07509 25.64541 28.13238 30.90565 33.9990 37.45024 41.30134 45.59917 50.39593 55.74972 75.83636 27.67123 30.53900 33.75999 37.3790 41.44626 46.01846 51.15909 56.93949 63.43968 88.21181 29.77808 33.06595 36.78559 40.9955 45.76196 51.16012 57.27500 64.20283 72.05244 102.44358 10 11 13 14 15 34.40536 37.27972 47.58041 17 18 19 20 67890 H2BHS 45678 NM45 61
Transcribed Image Text:TABLE 1 Future Value of 1 (n) Periods 4% 5% 6% 7% 8% 9% 11% 15% 0 1.00000 1.00000 1.00000 1.06000 1.07000 1 1.15000 2 1.08160 1.12360 1.14490 3 1.32250 1.36763 1.40493 1.52088 1.51807 1.57352 1.74901 4 1.41158 1.46410 1.53862 1.61051 5 1.68506 1.76234 2.01136 2.31306 2.66002 10% 12% 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.04000 1.05000 1.08000 1.09000 1.10000 1.11000 1.12000 1.10250 1.16640 1.18810 1.21000 1.23210 1.25440 1.12486 1.15763 1.19102 1.22504 1.25971 1.29503 1.33100 1.16986 1.21551 1.26248 1.31080 1.36049 1.21665 1.27628 1.33823 1.40255 1.46933 1.26532 1.34010 1.41852 1.50073 1.58687 1.67710 1.77156 1.87041 1.97382 1.31593 1.40710 1.50363 1.60578 1.71382 1.82804 1.94872 2.07616 2.21068 1.36857 1.47746 1.59385 1.71819 1.85093 1.99256 2.14359 2.30454 2.47596 1.42331 1.55133 1.68948 1.83846 1.99900 2.17189 2.35795 2.55803 2.77308 1.48024 1.62889 1.79085 1.96715 2.15892 2.36736 2.59374 2.83942 3.10585 1.53945 1.71034 1.89830 2.10485 2.33164 2.58043 2.85312 3.15176 3.47855 1.60103 1.79586 2.01220 2.25219 2.51817 2.81267 3.13843 3.49845 3.89598 5.35025 1.66507 1.88565 2.13293 2.40985 2.71962 3.06581 3.45227 3.88328 4.36349 6.15279 1.73168 1.97993 2.26090 2.57853 2.93719 3.34173 3.79750 4.31044 4.88711 7.07571 1.80094 2.07893 2.39656 2.75903 3.17217 3.64248 4.17725 4.78459 5.47357 1.87298 2.18287 2.54035 2.95216 3.42594 3.97031 4.59497 5.31089 6.13039 1.94790 2.29202 2.69277 3.15882 3.70002 4.32763 5.05447 5.89509 6.86604 2.02582 2.40662 2.85434 3.37993 3.99602 4.71712 5.55992 6.54355 7.68997 2.10685 2.52695 3.02560 3.61653 4.31570 5.14166 6.11591 7.26334 8.61276 14.23177 2.19112 2.65330 3.20714 3.86968 4.66096 5.60441 6.72750 8.06231 9.64629 16.36654 3.05902 3.51788 4.04556 10 11 4.65239 12 13 14 15 8.13706 16 9.35762 17 10.76126 18 12.37545 19 20 TABLE 2 Future Value of an Annuity of 1 (n) Payments 4% 10% 11% 12% 1 2 3 9 5% 6% 7% 8% 9% 15% 1.00000 1.00000 1.00000 1.0000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 2.04000 2.05000 2.06000 2.0700 2.08000 2.09000 2.10000 2.11000 2.12000 2.15000 3.12160 3.15250 3.18360 3.2149 3.24640 3.27810 3.31000 3.34210 3.37440 3.47250 4.24646 4.31013 4.37462 4.4399 4.50611 4.57313 4.64100 4.70973 4.77933 4.99338 5.41632 5.52563 5.63709 5.7507 5.86660 5.98471 6.10510 6.22780 6.35285 6.74238 6.63298 6.80191 6.97532 7.1533 7.33592 7.52334 7.71561 7.91286 8.11519 8.75374 7.89829 8.14201 8.39384 8.6540 8.92280 9.20044 9.48717 9.78327 10.08901 11.06680 9.21423 9.54911 9.89747 10.2598 10.63663 11.02847 11.43589 11.85943 12.29969 13.72682 10.58280 11.02656 11.49132 11.9780 12.48756 13.02104 13.57948 14.16397 14.77566 16.78584 12.00611 12.57789 13.18079 13.8164 14.48656 15.19293 15.93743 16.72201 17.54874 20.30372 13.48635 14.20679 14.97164 15.7836 16.64549 17.56029 18.53117 19.56143 20.65458 24.34928 12 15.02581 15.91713 16.86994 17.8885 18.97713 20.14072 21.38428 22.71319 24.13313 29.00167 16.62684 17.71298 18.88214 20.1406 21.49530 22.95339 24.52271 26.21164 28.02911 34.35192 18.29191 19.59863 21.01507 22.5505 24.21492 26.01919 27.97498 30.09492 32.39260 40.50471 20.02359 21.57856 23.27597 25.1290 27.15211 29.36092 31.77248 21.82453 23.65749 25.67253 27.8881 30.32428 33.00340 35.94973 39.18995 42.75328 55.71747 23.69751 25.84037 28.21288 30.8402 33.75023 36.97351 40.54470 44.50084 48.88367 65.07509 25.64541 28.13238 30.90565 33.9990 37.45024 41.30134 45.59917 50.39593 55.74972 75.83636 27.67123 30.53900 33.75999 37.3790 41.44626 46.01846 51.15909 56.93949 63.43968 88.21181 29.77808 33.06595 36.78559 40.9955 45.76196 51.16012 57.27500 64.20283 72.05244 102.44358 10 11 13 14 15 34.40536 37.27972 47.58041 17 18 19 20 67890 H2BHS 45678 NM45 61
TABLE 3 Present Value of 1 (n) Periods 4% 5% 6% 7% 8% 9% 10% 11% 12% 15% 1 .96154 .95238 .94340 0.93458 .92593 .91743 .90909 .90090 .89286 .86957 2 .92456 .90703 .89000 0.87344 .85734 .84168 .82645 .81162 .79719 .75614 3 .88900 .86384 .83962 0.81630 .79383 .77218 .75132 .73119 .71178 .65752 4 .85480 .82270 .79209 0.76290 .73503 .68301 .65873 .63552 .57175 .70843 .68058 .64993 5 .82193 .78353 .74726 0.71299 .62092 .59345 .56743 .49718 6 .79031 .74622 .70496 0.66634 .63017 .59627 .56447 .53464 50663 .43233 7 .75992 .71068 .66506 0.62275 .58349 .54703 .51316 .48166 .45235 .37594 8 .67684 .62741 0.58201 .54027 .50187 .46651 .43393 .40388 .32690 9 .73069 .70259 .64461 .59190 .55839 0.54393 .50025 .46043 .42410 .39092 .36061 .28426 10 .67556 .61391 0.50835 .46319 .42241 .38554 .35218 .32197 .24719 11 .64958 .58468 .52679 0.47509 .42888 .38753 .35049 .31728 .28748 .21494 12 .62460 .55684 .49697 0.44401 .39711 .35554 .31863 .28584 .25668 .18691 13 .60057 .53032 .46884 0.41496 .36770 .32618 .28966 .25751 .22917 .16253 14 .57748 .50507 .44230 0.38782 .34046 .29925 .26333 .23199 .20462 .14133 15 .55526 .48102 .41727 0.36245 .31524 27454 .23939 .20900 .18270 .12289 16 .53391 .29189 25187 .21763 .18829 .16312 .10687 .45811 .39365 0.33873 .43630 .37136 17 .51337 0.31657 .27027 .23107 .19785 .16963 .14564 .09293 18 .49363 .41552 .35034 0.29586 25025 .21199 .17986 .15282 .13004 .08081 19 .47464 .39573 .33051 0.27615 .23171 .19449 .16351 .13768 .11611 .07027 20 .45639 .37689 .31180 0.25842 .21455 .17843 .14864 .12403 .10367 .06110 TABLE 4 Present Value of an Annuity of 1 (n) Payments 4% 5% 6% 7% 8% 9% 10% 11% 12% 15% 1 .89286 .86957 2 3 4 5 4.91732 .96154 .95238 .94340 0.93458 .92593 .91743 .90909 .90090 1.88609 1.85941 1.83339 1.80802 1.78326 1.75911 1.73554 1.71252 1.69005 1.62571 2.77509 2.72325 2.67301 2.62432 2.57710 2.53130 2.48685 2.44371 2.40183 2.28323 3.62990 3.54595 3.46511 3.38721 3.31213 3.23972 3.16986 3.10245 3.03735 2.85498 4.45182 4.32948 4.21236 4.10020 3.99271 3.88965 3.79079 3.69590 3.60478 3.35216 5.24214 5.07569 4.76654 4.62288 4.48592 4.35526 4.23054 4.11141 3.78448 6.00205 5.78637 5.38929 5.20637 5.03295 4.86842 4.71220 4.56376 4.16042 6.73274 6.46321 5.97130 5.74664 5.53482 5.33493 5.14612 4.96764 4.48732 7.43533 7.10782 6.51523 6.24689 5.99525 5.75902 5.53705 5.32825 4.77158 8.11090 7.72173 6.71008 6.41766 6.14457 5.88923 5.65022 5.01877 8.76048 8.30641 7.13896 6.80519 6.49506 6.20652 5.93770 5.23371 9.38507 8.86325 7.53608 7.16073 6.81369 6.49236 6.19437 5.42062 9.98565 9.39357 7.90378 7.48690 7.10336 6.74987 6.42355 5.58315 10.56312 9.89864 8.24424 7.78615 7.36669 6.98187 6.62817 5.72448 11.11839 10.37966 8.06069 7.60608 7.19087 6.81086 5.84737 11.65230 10.83777 10.10590 9.44665 8.85137 8.31256 7.82371 7.37916 6.97399 5.95424 12.16567 11.27407 10.47726 9.76322 9.12164 8.54363 8.02155 7.54879 7.11963 6.04716 12.65930 11.68959 10.82760 10.05909 9.37189 8.75563 8.2 0141 7.70162 7.24967 6.12797 13.13394 12.08532 11.15812 10.33560 9.60360 8.95012 8.36492 7.83929 7.36578 6.19823 13.59033 12.46221 11.46992 10.59401 9.81815 9.12855 8.51356 7.96333 7.46944 6.25933 5.58238 6.20979 6.80169 7.36009 7.02358 7.88687 7.49867 8.38384 7.94269 8.85268 8.35765 9.29498 8.74547 9.71225 9.10791 8.55948 14 15 16 17 18 19 20 67890 MLBHS6 10 11 12 13
Transcribed Image Text:TABLE 3 Present Value of 1 (n) Periods 4% 5% 6% 7% 8% 9% 10% 11% 12% 15% 1 .96154 .95238 .94340 0.93458 .92593 .91743 .90909 .90090 .89286 .86957 2 .92456 .90703 .89000 0.87344 .85734 .84168 .82645 .81162 .79719 .75614 3 .88900 .86384 .83962 0.81630 .79383 .77218 .75132 .73119 .71178 .65752 4 .85480 .82270 .79209 0.76290 .73503 .68301 .65873 .63552 .57175 .70843 .68058 .64993 5 .82193 .78353 .74726 0.71299 .62092 .59345 .56743 .49718 6 .79031 .74622 .70496 0.66634 .63017 .59627 .56447 .53464 50663 .43233 7 .75992 .71068 .66506 0.62275 .58349 .54703 .51316 .48166 .45235 .37594 8 .67684 .62741 0.58201 .54027 .50187 .46651 .43393 .40388 .32690 9 .73069 .70259 .64461 .59190 .55839 0.54393 .50025 .46043 .42410 .39092 .36061 .28426 10 .67556 .61391 0.50835 .46319 .42241 .38554 .35218 .32197 .24719 11 .64958 .58468 .52679 0.47509 .42888 .38753 .35049 .31728 .28748 .21494 12 .62460 .55684 .49697 0.44401 .39711 .35554 .31863 .28584 .25668 .18691 13 .60057 .53032 .46884 0.41496 .36770 .32618 .28966 .25751 .22917 .16253 14 .57748 .50507 .44230 0.38782 .34046 .29925 .26333 .23199 .20462 .14133 15 .55526 .48102 .41727 0.36245 .31524 27454 .23939 .20900 .18270 .12289 16 .53391 .29189 25187 .21763 .18829 .16312 .10687 .45811 .39365 0.33873 .43630 .37136 17 .51337 0.31657 .27027 .23107 .19785 .16963 .14564 .09293 18 .49363 .41552 .35034 0.29586 25025 .21199 .17986 .15282 .13004 .08081 19 .47464 .39573 .33051 0.27615 .23171 .19449 .16351 .13768 .11611 .07027 20 .45639 .37689 .31180 0.25842 .21455 .17843 .14864 .12403 .10367 .06110 TABLE 4 Present Value of an Annuity of 1 (n) Payments 4% 5% 6% 7% 8% 9% 10% 11% 12% 15% 1 .89286 .86957 2 3 4 5 4.91732 .96154 .95238 .94340 0.93458 .92593 .91743 .90909 .90090 1.88609 1.85941 1.83339 1.80802 1.78326 1.75911 1.73554 1.71252 1.69005 1.62571 2.77509 2.72325 2.67301 2.62432 2.57710 2.53130 2.48685 2.44371 2.40183 2.28323 3.62990 3.54595 3.46511 3.38721 3.31213 3.23972 3.16986 3.10245 3.03735 2.85498 4.45182 4.32948 4.21236 4.10020 3.99271 3.88965 3.79079 3.69590 3.60478 3.35216 5.24214 5.07569 4.76654 4.62288 4.48592 4.35526 4.23054 4.11141 3.78448 6.00205 5.78637 5.38929 5.20637 5.03295 4.86842 4.71220 4.56376 4.16042 6.73274 6.46321 5.97130 5.74664 5.53482 5.33493 5.14612 4.96764 4.48732 7.43533 7.10782 6.51523 6.24689 5.99525 5.75902 5.53705 5.32825 4.77158 8.11090 7.72173 6.71008 6.41766 6.14457 5.88923 5.65022 5.01877 8.76048 8.30641 7.13896 6.80519 6.49506 6.20652 5.93770 5.23371 9.38507 8.86325 7.53608 7.16073 6.81369 6.49236 6.19437 5.42062 9.98565 9.39357 7.90378 7.48690 7.10336 6.74987 6.42355 5.58315 10.56312 9.89864 8.24424 7.78615 7.36669 6.98187 6.62817 5.72448 11.11839 10.37966 8.06069 7.60608 7.19087 6.81086 5.84737 11.65230 10.83777 10.10590 9.44665 8.85137 8.31256 7.82371 7.37916 6.97399 5.95424 12.16567 11.27407 10.47726 9.76322 9.12164 8.54363 8.02155 7.54879 7.11963 6.04716 12.65930 11.68959 10.82760 10.05909 9.37189 8.75563 8.2 0141 7.70162 7.24967 6.12797 13.13394 12.08532 11.15812 10.33560 9.60360 8.95012 8.36492 7.83929 7.36578 6.19823 13.59033 12.46221 11.46992 10.59401 9.81815 9.12855 8.51356 7.96333 7.46944 6.25933 5.58238 6.20979 6.80169 7.36009 7.02358 7.88687 7.49867 8.38384 7.94269 8.85268 8.35765 9.29498 8.74547 9.71225 9.10791 8.55948 14 15 16 17 18 19 20 67890 MLBHS6 10 11 12 13
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