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 here Original cost Salvage value Estimated annual cash inflows Estimated annual cash outflows Machine A $75,500 8 years 0 Net present value $20.000 $5,000 Which machine should be purchased? Machine B $180,000 Click here to view PV 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) Machine A $40,000 $10,000 Machine B SUPPORT

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 here Original cost Salvage value Estimated annual cash inflows Estimated annual cash outflows Machine A $75,500 8 years 0 Net present value $20.000 $5,000 Which machine should be purchased? Machine B $180,000 Click here to view PV 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) Machine A $40,000 $10,000 Machine B SUPPORT

Name: BAK Corp. is considering purchasing one of two new diagnostic machine
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Description: BAK Corp. is considering purchasing one of two new diagnostic machines. Either machine would make it possible for the companyto bid on jobs that it currently isn't equipped to do. Estimates regarding each machine are provided hereOriginal costEstima

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter19: Capital Investment

Section: Chapter Questions

Problem 2CE

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