Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. bak corp. is considering purchasing one of two new

BAK Corp. is considering purchasing one of two new diagnostic machines. Either machine would make...

90.2K

Verified Solution

Question

Accounting

image
BAK Corp. is considering purchasing one of two new diagnostic machines. Either machine would make it possible for the company to Bd 8 juu that it currently isn't equipped to do. Estimates regarding each machine are provided below. Machine A Machine B Original cost $77,500 $186,000 Estimated life 8 years 8 years Salvage value Estimated annual cash inflows $19,500 $39,600 Estimated annual cash outflows $5,040 $9,800 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 eg45 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 calaulation purposes, use 5 decimal places as displayed in the factor table provided.) Machine B Machine A Net present value Profitability index Which machine should be purchased? 1219 PM 11/30/2015

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students