MKM International is seeking to purchase a new CNC machine in order to reduce costs. Two alternative machines are in consideration. Machine 1 costs $550,000, but yields a 15 percent savings over the current machine used. Machine 2 costs $950,000, but yields a 25 percent savings over the current machine used. In order to meet demand, the following forecasted cost information for the current machine is also provided. Year 1 2 3 4 5 $ Project Cost 1,000,000 1,350,000 1,400,000 1,450,000 2,400,000 a. Based on the NPV of the cash flows for these 5 years, which machine should MKM International purchase? Assume a discount rate of 12 percent. Assuming a discount rate of 12 percent, MKM International should purchase machine 2 because the NPV of machine 1 is $ $ (Enter your responses rounded to the nearest whole number.) b. If MKM International lowered its required discount rate to 7 percent, what machine would it purchase? Assuming a discount rate of 7 percent, MKM International should purchase machine 1 because the NPV of machine 1 is $ (Enter your responses rounded to the nearest whole number.) and the NPV of machine 2 is and the NPV of machine 2 is

MKM Internationat is seeking to purchase a new CNC machine in order to redice costs. Two allernative machines are in consideration Machine 1 costs $50,000, but yields a 15 percent savings over the current machine used Machine 2 costs $950,000, but yields a 25 percent savings over the current machine used in order to meet demand, the following forecasted cost information for the current machine is also provided 3. Based on the NPV of the cash flows for these 5 years, which machine should MKaA international purchase? Assume a discount rate of 12 percent Assuming a discount rate of 12 percent, MKM international should purchase because the NPV of machine 1 is 1 and the NPV of machine 2 is \$ (Ender your responses rounded to the nearest whole number.) b. If MKM inteinational lowered its required discount rate to 7 percent, what machine would if purchase? Assuming a discount rate of 7 percent, MKM international should purchase because the NPV of machine 1 is 1 and the NPV of machine 2 is (Enter your responses rounded to the nearest whole number.) MKM International is seeking to purchase a new CNC machine in order to redice costs. Two alernative machines are in consideration Machine 1 costs $550,000, but yields a 15 percent savings over the current machine used Machine 2 costs $950,000. but yelds a 25 percent savings over the current machine used In order to meet demand, the following forecasted cost intormation for the current machine is also provided a. Based on the NPV of the cash flows for these 5 years, which machine should MkM international purchase? Assume a discount rate of 12 percent Assuming a discount rate of 12 percent. MiKM internatoonal should purchase because the NPV of machine 1 is 1 and the NPV of machine 2 is 9 (Enter your responses rounded to the nearest whoie riumber) b. If MKKM international lowered is required discount rate to 7 percent, what machine would if purchase? Assuming a discount rate of 7 percent, MKM international should puichase because the NPV of machine t is s and the NPV of machine 2 is (Enter your responses rounded to the nearest whole number)