Which machine should be purchased, Accounting Basics

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Which machine should be purchased

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 $77,540 $189,500
Estimated life 8 years 8 years
Salvage value 0 0
Estimated annual cash inflows $19,860 $40,250
Estimated annual cash outflows $5,080 $9,120

Calculate the net present value and profitability index of each machine. Assume a 9% discount rate.

Machine A
Net present value $
Profitability index
Machine B
Net present value $
Profitability index

Which machine should be purchased?

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Accounting Basics: Which machine should be purchased

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Accounting Basics: Which machine should be purchased

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Recent Questions Asked Accounting Basics

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Request for Solution File

Ask an Expert for Answer!!

Accounting Basics: Which machine should be purchased

Reference No:- TGS0679530

Recent Questions Asked Accounting Basics

Q : How management can prevent employees

Q : Xpected sales for tents

Q : What is keplers earnings per share

Q : What is the times interest earned ratio

Q : Which machine should be purchased

Q : Calculate the variable overhead spending and efficiency

Q : How much do you need to have in your bank account

Q : Find the project payback period if the initial cost is given

Q : The business of injection molding of plastics

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