(NPV) A company has the choice between two different types of machines Machine A costs less, but it also has a shorter life expectancy of two years B costs more but lasts longer for four years The expected cash flows after taxes for the two different types are as follows Machine 0 1 2 3 4 A (10,000) 8,000 8,000 B (12,000) 5,000 5,000 5,000 5,000 The cost of money of the firm is 10 Analyze the two options and advise the company which one is better show how to solve with formula and with financial calculator

Question: (NPV) A company has the choice between two different types of machines. Machine A costs less, but it also has a shorter life expectancy of

(NPV) A company has the choice between two different types of machines. Machine A costs less, but it also has a shorter life expectancy of two years. B costs more but lasts longer for four years. The expected cash flows after taxes for the two different types are as follows:

Machine	0	1	2	3	4
A	(10,000)	8,000	8,000
B	(12,000)	5,000	5,000	5,000	5,000

The cost of money of the firm is 10%. Analyze the two options and advise the company which one is better.

show how to solve with formula and with financial calculator

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