# e12-a - Name: Date: Instructor: Course: rd Managerial...

This preview shows pages 1–2. Sign up to view the full content.

FileName: 69e559e13c90cae9cb53da347fdebf0362804eba.xls, Tab: Exercise E12-3, Page 1 of 2, 12/28/2011, 19:01:46 Name: Date: Instructor: Course: Machine A Machine B Original cost \$78,000 \$190,000 Estimated life 8 8 years Salvage value \$0 \$0 Estimated annual cash inflows \$20,000 \$40,000 Estimated annual cash outflows \$5,000 \$9,000 Instructions: Calculate the net present value and profitability index of each machine. Assume a 9% discount rate. Which machine should be purchased? Project A X = Title Amount X Formula = Formula Title Amount X Formula = Formula Formula Capital investment Amount Net present value Formula Hint: Use the =PV Excel formula for the 9% Discount Factor. Profitability index Project B X = Title Amount X Formula = Formula Title Amount X Formula = Formula Formula Capital investment Amount Net present value Formula Hint: Use the =PV Excel formula for the 9% Discount Factor. Profitability index Enter your text answer here. Managerial Accounting, 3

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
This is the end of the preview. Sign up to access the rest of the document.

## e12-a - Name: Date: Instructor: Course: rd Managerial...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document
Ask a homework question - tutors are online