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Q5. A company is considering the purchase of either Machine A or Machine B. The interest rate is 10%. Initial Cost Service Life Machine

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Q5. A company is considering the purchase of either Machine A or Machine B. The interest rate is 10%. Initial Cost Service Life Machine A $85,000 20 Years Salvage Value $20,000 Operating Costs $18,000 per year for 20 years Machine B $115,000 25 Years $25,000 $15,000 per year for first 15 years and $20,000 per year afterwards If a fund equals to the present worth of the cost of purchasing and operating Machine A over 20 years was invested at 10% per year, what would be the value of the investment at the end of 20 years? $1,582,787.49.

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