Considering the purchase of two machines

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Reference no: EM131010340

ACE Co. is considering the purchase of two machines. Machine A costs $100,000 with annual cost of $20,000. It will last for 5 years, and have a salvage value of $5,000 at the end of 5 years. Machine B costs $145,000 with annual costs of $17,500, and has a useful life of 8 years. The discount rate is 10%. Which machine should the company buy?

Reference no: EM131010340

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