Question: 1. Consider you have been asked by your supervisor to choose between two different copy machines for the office. Assume a discount rate of 8%.

1. Consider you have been asked by your supervisor to choose between two different copy machines for the office. Assume a discount rate of 8%.

Machine A has an upfront cost of $500,000 and an operating cost of $70 per year for 5 years.

Machine B has an upfront cost of $350,000 and an operating cost of $100 per year for 3 years.

Which copy do you recommend the firm purchase and why?

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