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The Pantry Vending Machine Company is looking to expand its business by adding a new line of vending machines. The management team is considering expanding
The Pantry Vending Machine Company is looking to expand its business by adding a new line of vending machines. The management team is considering expanding into either soda machines or snack machines. Following is the relevant financial data relating to the decision: Soda Machines $74,000 5 Investment Useful life (years) Estimated annual net cash inflows for useful life Residual value Depreciation method Required rate of return $20,000 $40,000 Straight-line 6% Snack Machines $65,000 10 $13,000 $7,000 Straight-line 10% Using the net present value model, which alternative should Pantry Vending Machine Company select? O A. The snack machines should be selected. OB. The soda machines should be selected. O c. Both investments should be selected. OD. Neither investment should be selected
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