Replacement model

A person is considering to purchase a machine for his factory. The related data about the alternative machines are as follows: TABLE 11.22 Machine A Machine B Machine C Present investment ) 10,000 12,000 15,000 Total annual cost ) 2,000 1,500 1,200 Life (years) 10 10 10 Salvage value ) 500 1,000 1,200 As an adviser of the company, you have been asked to select the best machine considering 12% normal rate of return per year. Given present worth factor @ 12% for 10 years = 5.650, present worth factor @ 12% for 10th year = 0.322