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

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

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