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Tim Smunt has been asked to evaluate two machines. After some investigation, he determines that they have the costs shown in the following table: Machine

Tim Smunt has been asked to evaluate two machines. After some investigation, he determines that they have the costs shown in the following table:

Machine A Machine B
Original Cost $15,000 $20,000
Labor per year $2,400 $4,400
Maintenance per year $4,300 $1,000
Salvage value $2,400 $7,200

He is told to assume that:

1. The life of each machine is

3

years.

2. The company thinks it knows how to make

14%

on investments no more risky than this one.

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

Part 2

The NPV for Machine

A=$enter your response here

(round your response to the nearest whole number and include a minus sign if necessary).

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