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Lexis Company is considering the purchase of a new machine and must decide between two possible machines. The relevant data associated with each machine is
Lexis Company is considering the purchase of a new machine and must decide between two possible machines. The relevant data associated with each machine is shown below. Initial cost Initial Installation cost Life (years) Revenues pa Expenses pa Salvage value Machine A $275,000 $20,000 4 $180,000 $80,000 $40,000 Machine B $350,000 $30,000 7 $225,000 $140,000 $50,000 Ignoring all tax implications of this decision and assuming the company has a required rate of return of 10%, which machine should the company select
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