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Your firm currently uses machine A to produce its product. Machine A generates a cash-flow of $1,000 per unit and will last for 4 more

Your firm currently uses machine A to produce its product. Machine A generates a cash-flow of $1,000 per unit and will last for 4 more years from today. Machine A is fully paid for and has no salvage value.

You are considering replacing machine A with a new machine, Machine B. Machine B costs $20,000 and will generate $1,500 per unit and will also last for 4 years from today.

You decide to use NPV to determine whether to switch to Machine B. If you decide to switch to Machine B, you will stop using machine A.

In your NPV calculation for Machine B, for the cash-flows, you should use

Group of answer choices

-$500

-$1,000

-$1,500

-$2,500

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