Crane 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. Machine A Machine B Original cost $76,900 $186,000 Estimated life 8 years 8 years Salvage value 0 0 Estimated annual cash inflows $19,600 $39,800 Estimated annual cash outflows $5,150 $10,080 Click here to view PV 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 O 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.) Net present value Profitability index Machine A Which machine should be purchased? should be purchased. Machine B

Tassie Ltd is considering replacing an old management system with a new one. Use the following information to determine the feasibility of this replacement plan and explain your decision in detail.   Costs of new system:                                                           $80,000 Costs of old system:                                                            $95,000 Depreciations of new system:                                  Prime cost to zero Depreciations of old system:                                      $5,000 per year Life of old system:            will be written off in 5 years if no replacement Life of new system:                                                              5 years Salvage value of new system at the end of its life:                    $18,000 Salvage value of old system at the end of its life:                             $0 Market value of the old system now:                                      $55,000 Total savings from the new system:…

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An oil company is planning to install a new pipeline to connect storage tanks to a processing plant 1500m away. The connection will be needed for the foreseeable future. Both 80mm and 120mm pipes are being considered.       80 mm pipe 120mm pipe Initial cost $1500 $2500 Service life   12 yrs   12 yrs Salvage value $200 $300 Annual maintenance  $400 $300 Pump cost/hour $2.50 $1.40 Pump operation  600 hours/yr 600 hours/yr   For this analysis, the company will use an annual interest rate of 8%. Annual maintenance and pumping costs may be considered to be paid in their entireties at the end of the years in which their costs are incurred.  Disregarding the the initial and replacement pipe costs, what is the capitalized cost($) of the maintenance and pumping costs for the 80mm pipe?