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A company would like to purchase one of two machines - Machine A or Machine B. Machine A costs $500K in Year 0 and

 


A company would like to purchase one of two machines - Machine A or Machine B. Machine A costs $500K in Year 0 and generates the following benefits: Year 1 - $100K, Year 2-$95K, Year 3- $85K, Year 4 - $75K, Year 5- $65K, Year 6- $55K, Year 7- $25K. Machine B costs $500K in Year 0 and generates the following benefits: Year 1- $25K, Year 2- $50K, Year 3- $75K, Year 4 - $100K, Year 5-$125K, Year 6- $125K. Which machine should be selected and what is its payback? [k = 1000]

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