Question: Bruno is analyzing 2 machines to determine which one it should purchase. The company requires a rate of return of 14.6% and uses straight live

Bruno is analyzing 2 machines to determine which one it should purchase. The company requires a rate of return of 14.6% and uses straight live depreciation to a zero book value over a machines life. Machines A costs 494,000 has annual after tax operating cashflow 18,000 and a life of 2 yrs. Machine B has a cost of 636,000 annual after tax operating cash flow cost of $7,400 and a life of 3 yrs. Machine purchased will be replaced at the end of its useful life. which machine should Bruno purchase and why?

A machine 33,020 or 23,218 or 26,812

B machine 26,812 or 36,200

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