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The life of each machine is 3 years. The company thinks it knows how to make 8 % on investments no more risky than this

The life of each machine is

3

years.

The company thinks it knows how to make

8 %

on investments no more risky than this one.

Labor and maintenance are paid at the end of the year.

The NPV for Machine A:

The NPV for Machine B:

Using the net present value as the basis of comparing the machines, Tim should

recommend:

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