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The Sunset Boulevard Straw Company specializes in decorative straw baskets. Currently, the company is analyzing purchase alternatives for an automated machine Data relevant to the

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The Sunset Boulevard Straw Company specializes in decorative straw baskets. Currently, the company is analyzing purchase alternatives for an automated machine Data relevant to the decision are as follows: Machine A Machine B Cost $90,000 $82,000 Useful Life 5 years 5 years Residual life $2.000 $3,000 Estimated annual Net Cash Flows $35,000 $30,000 The Present Value Multipliers at 12% are given: Dollar received at the end of 5 years 0.567 3,805 Dollar received at the end of each of the 5 years Using the net present value method, prepare an analysis to determine which machine the company should purchase, (The company uses a 12 percent minimum desired rate of return.)

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