Jax Inc is considering the purchase of a new machine for the production of computers. Machine A costs $4,000,000 and will last for seven years. Variable costs are 20% of sales, and fixed costs are $500,000 annually. Machine B costs $6,000,000 and will last for ten years.

Variable costs for the machine are 10% of sales, and fixed costs are $750,000 annually. The sales for each machine will be $4,000,000 per year. The required rate of return is 9%, the tax rate is 21%, and both machines will be depreciated using straight-line depreciation with no salvage value.

Calculate

the net present value for Machine B.

the net present value for machine A

the equivlent annual annuity for machine B