Gondoko Manufacturing is considering purchasing two machines. Each machine costs P90,000 and will produce cash flows as follows: End of Year Machine B A 1 P 50,000 P 10,000 2 40,000 20,000 3 20,000 110,000 Turk Manufacturing uses the net present value method to make the decision, and it requires a 15% annual return on its investments. Which machine should Turk purchase? Group of answer choices Neither machine is acceptable. Only Machine B is acceptable. Both machines are acceptable, but A should be selected because it has the greater net present value. Both machines are acceptable, but B should be selected because it has the greater net present value. Only Machine A is acceptable.
Gondoko Manufacturing is considering purchasing two machines. Each machine costs P90,000 and will produce cash flows as follows:
End of Year Machine
B A
1 P 50,000 P 10,000
2 40,000 20,000
3 20,000 110,000
Turk Manufacturing uses the
Group of answer choices
Neither machine is acceptable.
Only Machine B is acceptable.
Both machines are acceptable, but A should be selected because it has the greater net present value.
Both machines are acceptable, but B should be selected because it has the greater net present value.
Only Machine A is acceptable.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 2 images
