Sims industries, Inc. is considering two machines to replace an old machine. Machine A has a life of 10 years, will cost $24,500, and will produce net cash savings of $4,800 per year. Machine B has an expected life of 5 years, will cost $20,000, and will produce net cash savings in operating costs of $6,000 per year. The company's cost of capital is 14 percent. Compare the 2 and make a choice.

Answer rating: 100% (QA)

Machine A initial cost 24500 Annual cash savings 4800 ... View the full answer