Board members at Darbol Corporation received two proposals for a machine they may want to purchase. They also can choose to invest their capital and receive an interest rate of 15% annually. Using the following data about the machine, what is their most economical course of action? Use the net present worth method.

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Data Machine A Machine B Initial Cost $180,000 $240,000 Salvage Value $40,000 $45,000 Annual Benefit $75,000 $89,000 Annual Cost $21,000 $21,000 Life 5 years 10 years Data Machine A Machine B Initial Cost $180,000 $240,000 Salvage Value $40,000 $45,000 Annual Benefit $75,000 $89,000 Annual Cost $21,000 $21,000 Life 5 years 10 years

Answer rating: 100% (QA)

MACHINE A Year Net Cash Flow Discount Factor Discounted C... View the full answer