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You have the choice of two machines, A and B. Machine A costs $40,000 with a salvage value of $10,000 and will last 6 years.
You have the choice of two machines, A and B. Machine A costs $40,000 with a salvage value of $10,000 and will last 6 years. Machine B costs $36,000 with a salvage value of $8,000 and will last you 5 years. You need the machine for a total of 30 years. Which machine is a better investment for your company if i = 12% for both machines? Assume consistent repurchasing costs [20 pts]
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