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For machines U and V, details are provided. What will be the Delta IRR and which machine should be selected? Machine U Machine V Initial

For machines U and V, details are provided. What will be the Delta IRR and which machine should be selected?

Machine U Machine V
Initial cost $336,000 $430,000
Life in years 5 6
Inflation (for costs and benefits) 5% p. y.
MARR 9.69% p. y. c. y.
Project life 12 years
Salvage value of machine today $47,040 $60,200
Machine market value with 2 years of use $161,280
First year estimated costs $43,500 $49,800
First year estimated benefits $126,400 $134,935

Group of answer choices

3.83%, go with Machine U

8.42%, go with Machine U

9.69%, go with either Machine U or V

11.61%, go with Machine V

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