How much annual net profit would machine have

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Reference no: EM131955849

Question: You have the choice of purchasing one of two espresso machines to start your new coffee shop. Machine A costs $8, 000 and has a useful lifetime of 10 years, after which you can sell it for $1.500. Machine A's maintenance and operations cost $300 annually, and its espresso tastes good enough to get you S4.000 in annual net profit. Machine B costs $8.900 and has a useful lifetime of 7 years, after which you can sell it for $500. Machine B costs $350 annually to operate and maintain. How much annual net profit would Machine B have to gather for you to be indifferent: between Machine B and Machine A? Assume an annual discount rate of 6%, and response your answer to the nearest dollar.

Reference no: EM131955849

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