(Answered) Question - arrow corp is considering purchasing one of two

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Arrow 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	$78,250	$183,600
Estimated life	8 years	8 years
Salvage value	0	0
Estimated annual cash inflows	$20,450	$40,010
Estimated annual cash outflows	$4,960	$10,000

a. Calculate the net present value and profitability index of each machine. Assume a 9% discount rate.

b. Which machine should be purchased?

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