Given: Two investment opportunities:

Machine A Machine B First cost $13 000 $19 000 Revenues (p. a.) $7000 $9 000 Annual costs $9000 $10 000 Scrap value $1000 $2000 Service life 5 years 10 years NOTE: You require an MARR of 5%

Choices: You can pick none, either or both

Questions: 1. What type of decision is this? 2. What would you do? Do you get a different answer if you use a 3-year payback period?