MKM International is seeking to purchase a new CNC machine in order to reduce costs. Two...

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MKM International is seeking to purchase a new CNC machine in order to reduce costs. Two alternative machines are in consideration. Machine 1 costs $450,000, but yields a 15 percent savings over the current machine used. Machine 2 costs $850,000, but yields a 25 percent savings over the current machine used. In order to meet demand, the following forecasted cost information for the current machine is also provided. Year 1 Project Cost 1,000,000 2 1,250,000 3 1,450,000 4 5 1,550,000 2,400,000 a. Based on the NPV of the cash flows for these 5 years, which machine should MKM International purchase? Assume a discount rate of 12 percent. Assuming a discount rate of 12 percent, MKM International should purchase because the NPV of machine 1 is $ and the NPV of machine 2 is $ (Enter your responses rounded to the nearest whole number.) b. If MKM International lowered its required discount rate to 9 percent, what machine would it purchase? Assuming a discount rate of 9 percent, MKM International should purchase because the NPV of machine 1 is $ and the NPV of machine 2 is $ (Enter your responses rounded to the nearest whole number.) Please copy and paste data from text area below. Selected delimiter: Tab Project Cost Year 1 1,000,000 2 1,250,000 3 1,450,000 4 1,550,000 5 2,400,000 Done x MKM International is seeking to purchase a new CNC machine in order to reduce costs. Two alternative machines are in consideration. Machine 1 costs $450,000, but yields a 15 percent savings over the current machine used. Machine 2 costs $850,000, but yields a 25 percent savings over the current machine used. In order to meet demand, the following forecasted cost information for the current machine is also provided. Year 1 Project Cost 1,000,000 2 1,250,000 3 1,450,000 4 5 1,550,000 2,400,000 a. Based on the NPV of the cash flows for these 5 years, which machine should MKM International purchase? Assume a discount rate of 12 percent. Assuming a discount rate of 12 percent, MKM International should purchase because the NPV of machine 1 is $ and the NPV of machine 2 is $ (Enter your responses rounded to the nearest whole number.) b. If MKM International lowered its required discount rate to 9 percent, what machine would it purchase? Assuming a discount rate of 9 percent, MKM International should purchase because the NPV of machine 1 is $ and the NPV of machine 2 is $ (Enter your responses rounded to the nearest whole number.) Please copy and paste data from text area below. Selected delimiter: Tab Project Cost Year 1 1,000,000 2 1,250,000 3 1,450,000 4 1,550,000 5 2,400,000 Done x