Question: The NV for Machine B = $____ Using the NPV as the basis of comparing the machines, Tim should recommend Machine A, Machine B Tim
The NV for Machine B = $____
Using the NPV as the basis of comparing the machines, Tim should recommend "Machine A, Machine B"
Tim Smunt has been asked to evaluate two machines. After some investigation, he determines that they have the costs shown in the following table: Machine A Machine B Original Cost $15,000 $28,000 Labor per year $2,200 $4,400 Maintenance per year $4,600 $1,200 Salvage value $1.600 $7,200 He is told to assume that 1. The life of each machine is 3 years. 2. The company thinks it knows how to make 14% on investments no more risky than this one. 3. Labor and maintenance are paid at the end of the year. The NPV for Machine A=$(round your response to the nearest whole number and include a minus sign if necessary)Step by Step Solution
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