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Section A Machine X: Initial cost: $15000 Revenues (annual): $9000 Costs (annual): $6000 Scrap value: $1000 Service Life: 5 years Machine Y: Initial cost: $20000

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Section A Machine X: Initial cost: $15000 Revenues (annual): $9000 Costs (annual): $6000 Scrap value: $1000 Service Life: 5 years Machine Y: Initial cost: $20000 Revenues (annual): $11000 Costs (annual): $8000 Scrap value: $2000 Service Life: 10 years Determine the payback period of each machine and recommend which machine you would purchase. Now calculate the net present value using a discounted rate of 8% and determine which machine you would recommend purchasing, is your decision different

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