machine a… | Business & Finance homework help
Assuming a 10% interest rate, present-value analysis would indicate that Machine B should be chosen since it has the lower net present value. The calculation for machine A is as follows: (1,250,000 – 800,000)/(1 + 0.10)^5 = $133,897.40. The NPV of Machine B is (1,200,000 – 800,000)/(1 + 0.10)^5 = $128,502.08 . As such , choosing Machine B would result in greater savings over time due to its lower cost upfront and faster ROI potential from this investment – resulting in positive long-term performance outcomes overall.