Question: Two machines, A and B, which perform the same functions, have the following costs and lives. Type PV Costs Life Machine A $ 6,000 3

Two machines, A and B, which perform the same functions, have the following costs and lives.

Type PV Costs Life
Machine A $ 6,000 3 years
Machine B $ 8,000 6 years

Which machine would you choose? The two machines are mutually exclusive and the cost of capital is 15 percent.

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