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Pls analysis and determine which machine should purchase. ABC company requires a 12.5% rate of return and uses straight-line depreciation to a zero-book value. Machine1
Pls analysis and determine which machine should purchase. ABC company requires a 12.5% rate of return and uses straight-line depreciation to a zero-book value. Machine1 has a cost of $25,000, annual operating costs of $1,000, and a 3-year life. Machine2 costs $17,500, has annual operating costs of $1,300, and has a 2-year life. No matter which machine is purchased will be replaced at the end of its useful life. Which machine should be purchased and why?
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