Bakers Pride Corporation is considering purchasing one of two new mixing machines. Eithermachine would make it possible for the company to bid on jobs that it currently isn't equipped todo. Estimates regarding each machine are provided below.Original CostEstimated Useful LifeAnnual Cash FlowsAnnual cash outflowDough-MaticModel 100$99,0008 years$25,000$ 5,000Dough-MaticModel 200$149,0008 years$40,000$10,000InstructionsCalculate the net present value and profitability index of each machine. Assume a 9% discountrate. Which machine should be purchased?Note: factor for the present value of an ordinary annuity 8 years @9% = 5.53482

NPV is also known as Net Present Value.. It is a capital budgeting technique which helps in decision…

Answered: Bakers Pride Corporation is considering…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Please answer net present value and profitability index:
Uramilaben
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