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Vandalay Industries is considering the purchase of a new machine for the production of latex. Machine A costs $ 3 , 1 1 4 ,
Vandalay Industries is considering the purchase of a new machine for the production of latex. Machine A costs $ and will last for six years. Variable costs are percent of sales, and fixed costs are $ per year. Machine B costs $ and will last for nine years. Variable costs for this machine are percent and fixed costs are $ per year. The sales for each machine will be $ million per year. The required return is percent and the tax rate is percent. Both machines will be depreciated on a straightline basis. The company plans to replace the machine when it wears out on a perpetual basis.
Calculate the NPV for each machine. A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answers to decimal places, eg
tableMachine ANPVMachine B$
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