Question: Bruno's is analyzing two machines to determine which one it should purchase. The company requires a rate of return of 14.6 percent and uses straight-line

Bruno's is analyzing two machines to determine which one it should purchase. The company requires a rate of return of 14.6 percent and uses straight-line depreciation to a zero book value over a machine's life. Ignore taxes. Machine A has a cost of $320,000, annual operating costs of $8,500, and a life of 3 years. Machine B costs $247,000, has annual operating costs of $9,000, and a life of 2 years. Whichever machine is purchased will be replaced indefinitely at the end of its useful life. Which machine should Bruno's purchase and why? Indifferent; the machines produce the same saving. Machine A; because it will save the company about $13,406 a year Machine B; because it will save the company about $16,510 a year Machine A: because it will save the company about $12,436 a year Machine B: because it will save the company about $11,609 a year
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