$3.$ The Devine Beer Company is considering replacing a forklift used for inventory storage. It is considering two alternative forklifts:

$$ Forklift A:

o Cost $$200,000$ to purchase and install $($both depreciated$)$

o Lift has $5-$year life

o The investment will be depreciated over $5$ years to a book value of $0.$

o Devine expects the machine to have no value at the end of $5$ years.

o Removal expenditures are expected to be negligible $(0)$

o Machine Cost $$120,000$ per year to operate

o Tax rate $=40\%$

o Cost of capital $=12\%$

$$ Forklift B:

o Cost $$300,000$ to purchase and install $($both depreciated$)$

o Lift has $10-$year life

o The investment will be depreciated over $8$ years to a book value of zero.

o Devine expects the machine to have no value at the end of $10$ years.

o Removal expenditures are expected to be negligible $(0)$

o Machine Cost $$200,000$ per year to operate

o Tax rate $=40\%$

o Cost of capital $=12\%$

Question: Using NPV approach, which machine should Devine select? Show your calculations.