Tim Smunt has been asked to evaluate two machines. After some​ investigation, he determines that they have the costs shown in the following​ table:                                                                                                      Machine A  Machine B Original Cost $15,000   $24,000   Labor per year $2,400   $4,000   Maintenance per year $4,300   $800   Salvage value $2,000   $7,500     He is told to assume​ that:   1. The life of each machine is 3 years. 2. The company thinks it knows how to make 14​% on investments no more risky than this one. 3. Labor and maintenance are paid at the end of the year.   The NPV for Machine B=​  $._____enter your response here

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Tim Smunt has been asked to evaluate two machines. After some​ investigation, he determines that they have the costs shown in the following​ table:
                                                                                                  
 
Machine A
 Machine B
Original Cost
$15,000
 
$24,000
 
Labor per year
$2,400
 
$4,000
 
Maintenance per year
$4,300
 
$800
 
Salvage value
$2,000
 
$7,500
 
 
He is told to assume​ that:
 
1. The life of each machine is
3
years.
2. The company thinks it knows how to make
14​%
on investments no more risky than this one.
3. Labor and maintenance are paid at the end of the year.
 
The NPV for Machine
B=​  $._____enter your response here
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