Unequal liveslong dashANPV approachEvans 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 machinesA, B, and Care equally risky. The firm plans to use a cost of capital of 11.9% to evaluate each of them. The initial investment and annual cash inflows over the life of each machine are shown in the following table.

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?

Machine A $92,500 Initial investment (CF) Year (t) $11,600 11,600 11,600 11,600 11,600 11,600 Machine B Machine C $66,000 $100,800 Cash inflows (CF) $10,000 $30,900 20,300 30,900 30,700 30,900 40,000 30,900 30,900