MKM International is seeking to purchase a new CNC machine in order to reduce costs. Two alternative machines are in consideration. Machine $1$ costs $$600,000,$

but yields a $15$ percent savings over the current machine used. Machine $2$ costs $$850,000,$ 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.

$($i$)$

a$.$ Based on the NPV of the cash flows for these $5$ years, which machine should MKM International purchase? Assume a discount rate of $11$ percent.

Assuming a discount rate of $11$ percent, MKM International should purchase

because the NPV of machine $1$ is $

and the NPV of machine $2$ is

$$,.($Enter your responses rounded to the nearest whole number.$)$

b$.$ If MKM International lowered its required discount rate to $9$ percent, what machine would it purchase?

Assuming a discount rate of $9$ percent, MKM International should purchase

because the NPV of machine $1$ is $ and the NPV of machine $2$ is $

$($Enter your responses rounded to the nearest whole number.$)$