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 comma 000$15,000 | $ 24 comma 000$24,000 | ||
| Labor per year | $ 2 comma 200$2,200 | $ 4 comma 000$4,000 | ||
| Maintenance per year | $ 4 comma 600$4,600 | $ 1 comma 000$1,000 | ||
| Salvage value | $ 2 comma 000$2,000 | $ 7 comma 500$7,500 | ||
He is told to assume that:
1. The life of each machine is 33 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).
The NPV for Machine B = $________
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