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

$15,000

$28,000

Labor per year

$2,400

$4,000

Maintenance per year

$4,600

$800

Salvage value

$2,400

$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 12% 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).

The NPV for Machine B = $______ (round your response to the nearest whole number and include a minus sign if necessary).

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