Question: Please explain by Excel You are evaluating two different machines. The Helios 1 has an initial cost of $450,000 with a five-year life that will

Please explain by Excel

You are evaluating two different machines. The Helios 1 has an initial cost of $450,000 with a five-year life that will be depreciated down to zero using the straight-line method. The machine is expected to save

the company $125,000 in operating costs (pre-tax) each year it is in operation. Assume the machine can be sold for $25,000 at the end of its useful life. The Helios 2 costs $350,000, has a seven-year life that will be depreciated down to zero using straight-line method. Helios 2 will only save the company $75,000 per year (before taxes) but will have a salvage value of $35,000 at the end of its life. If your tax rate is 23 percent and your discount rate is 9 percent, compute the NPV and IRR for both machines. Which do you prefer?

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