Determine the two new diagnostic machines


SRB 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 below. Machine A Machine B Original cost $77,980 $189,500 Estimated life 8 years 8 years Salvage value 0 0 Estimated annual cash inflows $19,830 $40,150 Estimated annual cash outflows $4,900 $9,190 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 computations and final answer for present value to 0 decimal places, e.g. 125 and profitability index to 2 decimal places, e.g. 10.50. Round computations for Discount Factor to 5 decimal places.) Machine A Net present value $ Profitability index Machine B Net present value $ Profitability index

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Accounting Basics: Determine the two new diagnostic machines
Reference No:- TGS0714531

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