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A coffee company is considering buying a new machine. They are considering two machines. Machine A costs $450,000 and Machine B $650,000. They will both
A coffee company is considering buying a new machine. They are considering two machines. Machine A costs $450,000 and Machine B $650,000. They will both last 7 years. Machine A will produce $171,924 per year for 7 years and Machine B will produce $276,352 per year. The companies cost of capital is 10%. Compute the simple payback, net present value and internal rate of return for each machine and then make a recomendation as to what machine is best. Assume no tax impact. SHOW ALL YOUR WORK
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