The net present value (NPV) looks at the future cash flow that an asset you want to purchase, or a project you plan to run is likely to generate, and then discounts it to show the present value. You are considering two similar pieces of equipment that will be used on a project for five years: Machine A: Your Initial Investment $47000 Discount Rate 7% Cash flow Year 1 $11500 Cash flow Year 2 $11200 Cash flow Year 3 $12100 Cash flow Year 4 $11850 Cash flow Year 5 $11100 Machine B: Your initial investment $52000 Discount rate 7% Cash flow Year 1 $14000 Cash flow Year 2 $11100 Cash flow Year 3 $13500 Cash flow Year 4 $12200 Cash flow Year 5 $13700 What is the NPV for each machine? Which is the better choice and why? Bonus: What is the internal rate of return for each, and is it better than the discount rate