You are the owner of a small business that manufactures and sells widgets. You are considering two different machines to purchase for your production line. Machine A costs $100,000 and has a lifespan of 5 years. It is estimated to produce 1,000 widgets per year and requires $10,000 in maintenance per year. Machine B costs $150,000 and has a lifespan of 7 years. It is estimated to produce 1,500 widgets per year and requires $5,000 in maintenance per year. The selling price of each widget is $20, and the cost of producing each widget is $12.

Assuming a discount rate of 10%, which machine should you purchase to maximize the net present value of your business?

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