Question: 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

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

$ 12 comma 000$12,000

$ 20 comma 000$20,000

Labor per year

$ 2 comma 400$2,400

$ 4 comma 400$4,400

Maintenance per year

$ 4 comma 300$4,300

$ 800$800

Salvage value

$ 1 comma 600$1,600

$ 7 comma 000$7,000

He is told to assume that:

1. The life of each machine is

33

years.

2. The company thinks it knows how to make

88%

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).

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