A B C

Unequal lives--ANPV approach Evans Industries wishes to select the best of three possible machines, each of which is expected to satisfy the firm's ongoing need for additional aluminum-extrusion capacity. The three machines A, B, and C-are equally risky. The firm plans to use a cost of capital of 11.6% to evaluate each of them. The initial investment and annual cash inflows over the life of each machine are shown in the following table. (Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet.) Machine A Machine B Machine C Initial investment (CF) $92,500 $66,000 $101,000 Yeart) Cash inflows (CF) 1 $11,000 $9,600 $29,400 2 11,000 19.000 29,400 11,000 29,400 29,400 11,000 41,000 29,400 . a. The net prosent value for machine Als $(Round to the nearest cont.) ys 54 50 3 4 11 30 AM ling 525 230.04 Enter your answer in the new to) Question Help Initial investment (CF) $92,500 $66.000 $101.000 Yeart) Cash inflows (CF) 1 $11,000 $9,600 $29,400 2 11,000 19,000 29,400 3 11,000 29,400 29,400 4 11.000 41,000 29.400 5 11,000 29,400 6 11,000 Calculate the NPV for each machine over its life. Rank the machines in descending order on the basis of NPV. Use the annualized net present value (ANPV) approach to evaluate and rank the machines in descending order on the basis of ANPV. c. Compare and contrast your findings in parts (a) and (b). Which machine would you recommend that the firm acquire? a. The net present value for machine Ais $. (Round to the nearest cont.) F Enter your answer in the answer box and then click Check Answer 8 parts remaining Clear All