Jolly Roger Beverages Pty Ltd is considering purchasing one of two new rum fermenting machines to use at its Nowra distillery. The MegaDistiller 3000 costs $390,000 and is expected to have operating costs $33,000 per year for five years at which time it is considered worthless. The LiteBrewer 409 costs $350,000 and is expected to have operating costs of $29,500 per year for four years at which time it is considered worthless. Both machines perform the same function. The appropriate discount rate for the company is 10%. Based on an NPV analysis what should Jolly Roger Beverages do?

Group of answer choices

We do not have any information on revenues and therefore cannot make a decision.

Both have negative NPVs and therefore both should be rejected.

The company should buy the LiteBrewer 409.

The company should buy the MegaDistiller 3000.