Question 3 of 4View PoliciesShow Attempt HistoryCurrent Attempt in Progress<* Your answer is incorrect.Original costEstimated life>Salvage valueEstimated annual cash inflowsEstimated annual cash outflowsIndigo 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 is not equipped to do. Estimates for each machine are as follows:Click here to view the factor table.Net present value $Profitability indexMachine A$77,6008 years0$25,000$4,850Machine AMachine B185084.79$190,0008 years0$40,500$8,850Calculate the net present value and profitability index of each machine. Assume a 10% discount rate. (If the net present value is negative,use either a negative sign preceding the number e.g. -45 or parentheses e.g. (45). For calculation purposes, use 5 decimal places as displayed inthe factor table provided, e.g. 1.25124 and final answers to O decimal places, e.g. 5,275. Round profitability index answers to 3 decimal places,e.g. 12.521.)$0/4Machine B|||987073.05:SUPPORT

When an investment is discounted to the present, its net present value represents the total value of…

Indigo 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 is not equipped to do. Estimates for each machine are as follows: Original cost Estimated life Salvage value Estimated annual cash inflows Estimated annual cash outflows Machine A Machine B $77,600 $190,000 8 years 8 years 0 0 Net present value $ Profitability index $25,000 $4,850 Click here to view the factor table. Calculate the net present value and profitability index of each machine. Assume a 10% discount rate. (If the net present value is negative, use either a negative sign preceding the number e.g. -45 or parentheses e.g. (45). For calculation purposes, use 5 decimal places as displayed in the factor table provided, e.g. 1.25124 and final answers to 0 decimal places, e.g. 5,275. Round profitability index answers to 3 decimal places, e.g. 12.521.) Machine A $40,500 $8,850 185084.79 Machine B 987073.05

Indigo 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 is not equipped to do. Estimates for each machine are as follows: Original cost Estimated life Salvage value Estimated annual cash inflows Estimated annual cash outflows Machine A Machine B $77,600 $190,000 8 years 8 years 0 0 Net present value $ Profitability index $25,000 $4,850 Click here to view the factor table. Calculate the net present value and profitability index of each machine. Assume a 10% discount rate. (If the net present value is negative, use either a negative sign preceding the number e.g. -45 or parentheses e.g. (45). For calculation purposes, use 5 decimal places as displayed in the factor table provided, e.g. 1.25124 and final answers to 0 decimal places, e.g. 5,275. Round profitability index answers to 3 decimal places, e.g. 12.521.) Machine A $40,500 $8,850 185084.79 Machine B 987073.05

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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Please answer net present value and profitability index:
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