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Beryl's Iced Tea currently rents a bottling machine for $51,000 per year, including all maintenance expenses. It is considering purchasing a machine instead, and is
Beryl's Iced Tea currently rents a bottling machine for $51,000 per year, including all maintenance expenses. It is considering purchasing a machine instead, and is comparing two options: a. Purchase the machine it is currently renting for $155,000. This machine will require $25,000 per year in ongoing maintenance expenses. operators of the machine. advanced machine? To make this decision, calculate the NPV of the FCF associated with each alternative. Note: the NPV will be negative, and represents the PV of the costs of the machine in each case. The NPV of renting the machine is $. (Round to the nearest dollar. Enter a negative NPV as a negative value.) The NPV of option A is $ (Round to the nearest dollar. Enter a negative NPV as a negative value.) The NPV of option B is $ (Round to the nearest dollar. Enter a negative NPV as a negative value.) Which of the following is the best choice? (Select the best choice below.) A. Rent the advanced machine. B. Purchase the current machine. C. Rent the current machine. D. Purchase the advanced machine
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