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1.Assume company X is deciding between two machines (Machine A and Machine B) in order to add capacity to its existing plant. Using the cash

1.Assume company "X" is deciding between two machines (Machine A and Machine B) in order to add capacity to its existing plant. Using the cash flows in the table below, calculate the NPV for each machine and decide which project Company "X" should accept. Assume the cost of capital is 8.4%.

Year

Machine A

Machine B

0

-5000

-2000

1

500

500

2

1000

1500

3

1000

1500

4

1500

1500

5

2500

1500

6

1000

1500

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