Your manager has come to you for help making a decision on which new copy machine to purchase. Model 40 costs $15,000 and has a 3 year expected life. Operating expenses will be $100 per month. Model 60 costs $20,000 and will last 5 years, and costs $80 per month to operate. The Model 60 will have a $3,500 trade in value but the Model 40 will be worthless at the end of its life. The Finance department tells you that the appropriate discount rate to use is 9%. Which machine will you recommend purely on the financial implications for your firm?

Please write out work and solution and explain clearly.