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Jax Inc is considering the purchase of a new machine for the production of computers. Machine A costs $4.500.00 and will last for 5 years.

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Jax Inc is considering the purchase of a new machine for the production of computers. Machine A costs $4.500.00 and will last for 5 years. Variable costs are 20% of sales and fixed costs are $750,000 per year. Machine B costs $8.000.000 and will last for 15 years. Variable costs for the machine are 12% of sales and fixed costs are $1.500.000 per year. The sales for each machine will be $6.000.000 per year. The required rate of return is 7%, the tax rate is 21%, and both machines will be depreciated using straight-line with a no salvage value

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