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Calculate Machine A and Machine B probability index

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Reference no: EM132462685

Problem - 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 below.

 

Machine A

Machine B

Original cost

$76,100

$184,000

Estimated life

8 years

8 years

Salvage value

0

0

Estimated annual cash inflows

$19,900

$40,300

Estimated annual cash outflows

$5,140

$10,130

Required - Calculate Machine A and Machine B's NPV and probability index.

Reference no: EM132462685

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