One of two machines in the 3-year MACRS class with no direct revenue (cost only) must be selected long term need in a company with a MARR of 8.0%. Applying current tax law the taxes by year for each machine are shown as well as the yearly cost that stays constant each year. Prepare and report a valid worth measure of the ATCF/CFAT for both machines and clearly in your answer identify the preferred economic choice.

Machine	Life yrs	Purchase Cost	Yearly Cost	Year	1	2	3	4	5	6
A	4	44,500	19,000	Taxes	-8,820	-10,221	-6,486	-5,554
B	6	69,000	17,000	Taxes	-8,400	-10,011	-5,716	-4,644	-3,750	-3,750

Answer rating: 100% (QA)

First we have to calculate the after tax cash flows and NPV of both machin... View the full answer