• • S7.44 Cheryl Druehl needs to purchase a new milling machine. She is considering two different competing machines.

Milling Machine A will cost $300,000 and will return $80,000 per year for 6 years, with no salvage value. Milling machine B will cost $220,000 and will return $60,000 for 5 years, with a salvage value of $30,000. The firm is currently using 7% as the cost of capital. Using net present value as the criterion, which machine should be purchased?