Question: 1. Consider two machines that are designed differently but have exactly the same output capacity. However, they differ in their investment cost and the cost

1. Consider two machines that are designed differently but have exactly the same output capacity. However, they differ in their investment cost and the cost to operate them: Machine Investment Operational Operational (CO) Cost (C1) Cost (C2) A -12 -6 -6 B -10 -3 Machine A will operate for two years (years 1 and 2) while machine B will operate for one year (next year, year 1). Then both machines must be constantly replaced to keep the factory running. Assume a discount rate of 12% and no corporate taxes, Which machine is the better choice? They are both similar in their overall financial costs. . Machine A Machine B

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