What is the present total cost of the machine

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"Machine A costs $20,000 and will last 6 years, at which time the value of the machine is $6,000. Machine A is also worth $6,583 in 5 years). Machine B costs $14,000 and will last 3 years, after which the machine is worth $3,400. You can lease Machine B (only if you purchased one initially) for $4,000 per year (payment due at the end of the year).

You need either machine for 5 years (required service period). Both machines have the same production speed and capacity, and interest = 13% annually. The annual maintenance cost of each machine is negligible.

What is the Present Total Cost of the machine that should be purchased? Enter your answer as a positive number."

Reference no: EM132639387

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