A company is trying to decide which of the two machines to purchase. Each will involve an investment of Rs 10,000. The expected net incremental cash flows are given here.

The company's cost of capital is 10%. Calculate the NPV of each machine. If this is used as the basis of selection, which machine should be purchased?

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Year Machine A Machine B 1 5,000 2,000 2 3 4,000 3,000 2,000 5,000 4 2,000 4,000