QUESTION 30 Saxon Manufacturing is considering purchasing two machines. Each machine costs $10,000 and will produce cash flows as shown below. Saxon Manufacturing uses the net present value method to make the decision, and it requires a 15% annual return on its investments. The present value factors of 1 at 15% are: 1 year, 0.8696; 2 years, 0.7561; 3 years, 0.6575. Which machine should Saxon purchase? Year 1 2 3 A $5,000 $4,000 $2,000 B $1,000 $2,000 $11,000 O Only Machine A is acceptable. O Only Machine B is acceptable. O Both machines are acceptable, but A should be selected because it has the greater net present value. O Both machines are acceptable, but B should be selected because it has the greater net present value. O Neither machine is acceptable.

curchatest Only Mactine A is acceptabie Only Mactine Ei in acoegtable Buch machines are acongtabie, but A should bo selectod because it has the greater net present velue Bot machines awe acopptable, but B should be solected because it has the greater net present vatue. Nether machine as acceptable