Question: ABC Corp is evaluating two machines: Machine A costs $ 1 2 0 , 0 0 0 and will save $ 3 0 , 0

ABC Corp is evaluating two machines: Machine A costs $120,000 and will save $30,000 annually for 5 years. Machine B costs $150,000 and will save $40,000 annually for 5 years. Both machines have no salvage value and the firm's required return is 10%. Which machine should the firm choose based on the Profitability Index (PI)?

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