Srb corp is considering purchasing one of two new

Assignment Help Accounting Basics

Reference no: EM13574688

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?

Reference no: EM13574688

Questions Cloud

Scheer corporation is involved in the business of injection : scheer corporation is involved in the business of injection molding of plastics. it is considering the purchase of a

An investment project provides cash inflows of 760 per : an investment project provides cash inflows of 760 per year for eight years. what is the project payback period if the

Beginning three months from now you want to be able to : beginning three months from now you want to be able to withdraw 2500 each quarter from your bank account to cover

Calculate the variable overhead spending and efficiency : nbspprichard company has developed the following standard cost data based on 60000 direct labor hours which is 75 of

Srb corp is considering purchasing one of two new : srb corp. is considering purchasing one of two new diagnostic machines. either machine would make it possible for the

Friendlys shoe store has earnings before interest and : friendlys shoe store has earnings before interest and taxes of 21680 and net income of 12542. the tax rate is 34

Kepler corporation had 300000 shares of common stock : kepler corporation had 300000 shares of common stock outstanding during the year. kepler declared and paid cash

Xpected sales for tents at sandys camping gear are 4200 : xpected sales for tents at sandys camping gear are 4200 6100 2200 3400 and 5300 for the next five quarters. at the end

Evaluate the impact to a business when compensation such as : production budgets please respond to the followingfrom the first e-activity assess the external factors and policy

User Account

All Pages