Find Answer using Excel and show formula 1. NPV Machine A (round your response to the nearest whole number and include a minus sign if necessary) 2. NPV Machine B (round your response to the nearest whole number and include a minus sign if necessary)

3. Using the net present value as the basis of comparing the machines, Tim should recommend which machine?

Tim Smunt has been asked to evaluate two machines. After some investigation, he determines that they have the costs shown in the following table: Machine B Original Cost Labor per year Maintenance per year Salvage value Machine A $12,000 $2,000 $4,300 $2,400 $24,000 $4,400 $800 $7,000 He is told to assume that: 1. The life of each machine is 3 years. 2. The company thinks it knows how to make 14% on investments no more risky than this one. 3. Labor and maintenance are paid at the end of the year