Saint Andrews Chip Company is considering the purchase of a industrial trade bagging machine to reduce labor costs. The savings are expected b result in additional cash flows to Saint Andrews of $25,000 per year. The machine costs $125,000 and is expected to last for 10 years. Saint Andrews Chips has determined that the cost of capital for such an nvestment is 14%. The firm has the option to buy the machine with or vithout an annual service contract. The service contract would cost $120 per year (in addition to the original machine costs). The manufacturer promises "Good As New" servicing that essentially keeps the machine in new condition forever. Net of the cost of the service contract, the machine would then produce cash flows of $23,800 per year in perpetuity. Using he NPV method, first determine if Saint Andrews should 1) buy the machine without the service contract; 2) or buy the machine with the service contract, or 3) not buy the machine at all. Choose the best answer from the options provided below Don't buy the bagging machine