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1)XYZ Inc. is considering buying a machine costing $100,000. There are two options Machine A and Machine B. Machine A will generate revenue of $50,000,
1)XYZ Inc. is considering buying a machine costing $100,000. There are two options Machine A and Machine B. Machine A will generate revenue of $50,000, $ 50,000 and $20,000 in year 1, year 2 & year 3 respectively.Machine B will generate $30,000, $40,000 & $ 60,000 in year 1, year 2 & year 3 respectively.
At the end of 3 years machine A and machine B have salvage value of $30,000 and $25,000 respectively and the company is expecting to sell them in the open market at end of 3rd year.
Compare the 2 investments plans in terms of NPV
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