What is the net present value and profitability index

Assignment Help Accounting Basics

Reference no: EM132825821

Question

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.

Original cost: Machine A-$77,300 Machine B-180,000
Estimated life:Machine A-8 years, Machine B-8 years
Salvage value: Machine A-0, Machine B-0
Estimated annual cash inflows: Machine A-20,200, Machine B-40,000
Estimated annual cash outflows: Machine A-4,970, Machine B-9,860

What is the net present value and profitability index of each machine A and B. Assume there a 9% discount rate. 2nd question is which machine should be purchased?

Reference no: EM132825821

Questions Cloud

Calculate adjusting entries and adjusted trial balance : Calculate Adjusting Entries and Adjusted Trial Balance - An inventory ot office supplies on December 31, 2014 showed supplies on hand totaled P 38,000

Prepare tabular summary of the transactions : Please PREPARE TABULAR SUMMARY of the transactions, SPECIFY THE INCOMES AND EXPENSES

Compute the capital allowances in respect of the motor car : Compute the capital allowances in respect of the motor car and van for the respective year of assesment until 2019.

Describe literacy deficits : Provide a literacy intervention that you can use for each student to support their needs. Include the specific strategies, materials, time frame of the plan.

What is the net present value and profitability index : What is the net present value and profitability index of each machine A and B. Assume there a 9% discount rate. 2nd question is which machine should be purchase

Prepare entries for years 1 and 2 in the books : Prepare entries for years 1 and 2 in the books of Victory Company - designate them at fair value through other comprehensive income

Discuss the exercise of writing a proposed policy : In two to three sentences, succinctly state your proposed policy and its intended outcomes. Discuss the exercise of writing a proposed policy.

Evaluate the sustainability of the organization : For organizations to prosper globally necessitates the ability to embrace continual change through continual learning. Offer examples of the ways leaders might.

What many consider lesser missions of the community college : The readings Attached introduce you to what many consider the "lesser" missions of the community college, including lifelong learning, continuing education.

User Account

All Pages