Calculate the npv for machine b

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Reference no: EM132028524

Tim Smunt has been asked to evaluate two machines. After some investigation, he determines that they have the costs shown in the following table:

	Machine A	Machine B
Original Cost	$12,000	$24,000
Labor per year	$2,000	$4,400
Maintenance per year	$4,300	$1,000
Salvage value	$2,000	$7,200

He is told to assume? that:

1. The life of each machine is 3 years.

2. The company thinks it knows how to make 8?% on investments no more risky than this one.

3. Labor and maintenance are paid at the end of the year.

1. The NPV for Machine A=? $ ?

?(round your response to the nearest whole number and include a minus sign if? necessary).

2. Calculate the NPV for Machine B= $ ? ?(round your responses to two decimal places and include a minus sign if?necessary).

3. Using the net present value as the basis of comparing the? machines, Tim should recommend ?Machine A or B?

Reference no: EM132028524

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