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Marvel company is considering the acquisition of two machines. Marvel company is considering the acquisition of two machines Initianl Investment Annual operating revenues Annual expenses
Marvel company is considering the acquisition of two machines.
Marvel company is considering the acquisition of two machines Initianl Investment Annual operating revenues Annual expenses terminal salvage value estimated useful life Minimum desired rate of return Machine A $200,000 $100,000 $25,000 $10,000 5 years 14% Machine B $200,000 $160,000 $85,000 $20,000 5 years 14% Assume straight-line depreciation. Ignore income taxes. The present value of an ordinary annuity of one at 14% and 5 periods is 3.4331 the present value of one at 14% and 5 periods is 0.5194 required A-calculate the net present value for both machines B-Assume there are enough funds to purchase both machines. Should both machines be purchased? C-Assume there are funds to purchase only one machine.which machine should be purchasedStep by Step Solution
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