- 1. A plant engineer is considering two machines to purchase: 3 Item Machine A Machine B 3 Initial Cost $12,900 $17,150 o Annual Savings $5,600 $6,000 1 Annual Maintenance $3,300 $2,500 2 Expected Life 7 years 7 years 3 Salvage Value $1,750 $2,100 4 The firm's MARR is 12%. On the basis of the IRR criterion, which machine is the better choice? 5 5 7 Year Saving Cost Net cash flow Machine year 3 0 12,900 (-12600) 0 3 1 5,600 1 2 2 5,600 3 1 3 5,600 4 2 4 5,600 5 5 5,600 6 . 6 5,600 7 7 1 2. A 5 3 5 vo