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ABC Inc., a wedge manufacturer, is deciding between two machines used for making wedges. Machine A will cost $50,000 and Machine B will cost $70,000.
ABC Inc., a wedge manufacturer, is deciding between two machines used for making wedges. Machine A will cost $50,000 and Machine B will cost $70,000. The annual operating costs for Machine A and B are $7,500 and $6,000, respectively. Machine A will last for 2 years before it has to be replaced, whereas Machine B will last for 3 years before it must be replaced. If the required return for ABC is 16%, which machine should ABC choose? Ignore taxes. Multiple Choice Choose Machine B as its NPV is higher by $21,436. o Choose Machine A as its NPV is higher by $21,436. O Choose Machine A as its NPV is lower by $21,436. O Choose Machine A as its EAC is higher by $1,480. O Choose Machine B as its EAC is lower by $1,480
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