You are trying to choose between purchasing one of two machines for a factory. Machine A costs $15,351.00 to purchase and has a 3.00 year life….
You are trying to choose between purchasing one of two machines for a factory. Machine A costs $15,351.00 to purchase and has a 3.00 year life. Machine B costs $17,968.00 to purchase but has a 4.00 year life. Regardless of which machine you purchase, it will have to be replaced at the end of its operating life. Which machine should you choose and what is the cost TODAY of running the machine for the next 25.00 years? Assume a discount rate of 13.00 percent.