Can you put the excel solution too please.

You are asked to select the best purchase option: there are two machines. You are only given data on the costs, because the sales will be exactly the same for both alternatives. Therefore, you have to select the equipment that generates the lowest costs!

The MARR is 12% annual nominal, compounded annually for both machines.

1. Use the truncate method and make a recommendation
2. Use the AEC-method and make a recommendation.

Machine A Machine B

Initial investment $62,000 $77,000

Annual net cash flows 15,000 21,000

Salvage value 8,000 10,000

Useful life (years) 4 6