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Which machine should bruno purchase and why

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Reference no: EM132506143

Bruno, Inc. is analyzing two machines to determine which one they should purchase. The company requires a 10 % rate of return and uses straight-line depreciation to a zero book value. Machine A has a cost of $290,000, annual operating costs of $8,000, and a 3-year life. Machine B costs $180,000, has annual operating costs of $12,000, and has a 2-year life. Whichever machine is purchased will be replaced at the end of its useful life. The tax rate is 20%. Which machine should Bruno's purchase and why? (Round your answer to whole dollars)

Reference no: EM132506143

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