Unequal lives - ANPV approach. Evans Industries wishes to select the best of three possible machines, each of which is expected to satisfy the firm's ongoing need for additional aluminum-extrusion capcity.

P12-14 (similar to) Unequal lives--ANPV approach Evans Industries wishes to select the best of three possible machines, each of which is expected to satisfy the firm's ongoing need for additional aluminum-extrusion capacity. The three machines A, B, and Care equally risky. The firm plans to use a cost of capital of 122% to evaluate each of them. The initial investment and annual cash inflows over the life of each machine are shown in the following table. (Click on the icon located on the s top-night corner of the data table below in order to copy its contents into a spreadsheet.) 1 Machine A Machine B Machine C Initial investment (CF) $93,000 $64,500 $99,900 Year (t) Cash inflows (CF) $12,100 $10,200 $30,400 2 12,100 20,600 30,400 3 12,100 30,700 30,400 12.100 40,400 30,400 a. The net present value for machine Ais $(Round to the nearest cent) 4 F Enter your answer in the answer box and then click Check Answer 8 parts Clear All Check Answer remaining ERLEBEN Initial investment (CF) $93,000 $64,500 $99,900 Year (0) Cash inflows (CF) 1 $12,100 $10,200 $30,400 2 12,100 20,600 30,400 3 12,100 30,700 30,400 4 12,100 40,400 30,400 5 12,100 30,400 6 12,100 a. Calculate the NPV for each machine over its life. Rank the machines in descending order on the basis of NPV. b. Use the annualized net present value (ANPV) approach to evaluate and rank the machines in descending order on the basis of ANPV. c. Compare and contrast your findings in parts (a) and (b). Which machine would you recommend that the firm acquire? a. The net present value for machine Ais $(Round to the nearest cent) Enter your answer in the answer box and then click Check Answer. 8 parts remaining Clear All Che