P12-14 (similar to) Unequal liveslong dashANPV approachEvans Industries wishes to select the best of three possible machines, each of which is expected to satisfy the firm's ongoing need for additional aluminum-extrusion capacity. The three machineslong dashA, B, and Clong dashare equally risky. The firm plans to use a cost of capital of 12.4% to evaluate each of them. The initial investment and annual cash inflows over the life of each machine are shown in the following table.(Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet.) Machine A Machine B Machine C Initial investment (CF 0CF0) $92,300 $64,800 $101,200 Year (t t ) Cash inflows (CF Subscript tCFt) 1 $11,900 $10,700 $29,700 2 11,900 20,400 29,700 3 11,900 29,200 29,700 4 11,900 39,800 29,700 5 11,900 long dash 29,700 6 11,900 long dash long dash a. Calculate the NPV for each machine over its life. Rank the machines in descending order on the basis of NPV. b. Use the annualized net present value (ANPV) approach to evaluate and rank the machines in descending order on the basis of ANPV. c. Compare and contrast your findings in parts (a) and (b). Which machine would you recommend that the firm acquire?

	Machine A	Machine B	Machine C
Initial investment	$92,300	$64,800	$101,200
(CF 0CF0)
Year	Cash inflows
(t t )	(CF Subscript tCFt)
1	$11,900	$10,700	$29,700
2	11,900	20,400	29,700
3	11,900	29,200	29,700
4	11,900	39,800	29,700
5	11,900	0	29,700
6	11,900	0	0