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A company is considering two types of machines for a manufacturing process. Machine A has an immediate cost of $82,000, and its salvage value at
A company is considering two types of machines for a manufacturing process. Machine A has an immediate cost of $82,000, and its salvage value at the end of 8 years of service life is $16,000. The operating costs of this machine are estimated to be $3000 per year. Extra income taxes are estimated at $2100 per year. Machine B has an immediate cost of $30,000, and its salvage value at the end of 8 years' service is neglible. The annual operating costs for Machine B will be $9,000. There are no extra income taxes with Machine B. Compare these two mutually exclusive alternatives by the present-worth method at i = 12.1%. Enter the ."net present cost" as a positive number for the machine that you would select. You must select one of the two machines
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