Two independent machines are under consideration. The costs and other cash flows associated with each alternative are estimated. Determine which alternative(s) should be selected for further analysis if alternatives must have a payback of 5 years or less. Perform the payback analysis with i = 10% (discounted scenario).

Alternative	Machine 1	Machine 2
First Cost, $	-40,000	-85,000
Net income, $ per year	12,000	15,000
Maximum life, years	10	10

		Machine 1
		None
		Both
		Machine 2