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9. Reynold Company is considering two mutually exclusive machines. Machine A has an up-front cost...

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9. Reynold Company is considering two mutually exclusive machines. Machine A has an up-front cost of $100,000(CF0=100,00), and it produces positive after-tax cash inflows of $40,000 a year at the end of each of the next 6 years. Machine B has an up-front cost of $50,000 (CFo =50,000), and it produces after-tax cash inflows of $30,000J year at the end of the next 3 years. After 3 years, machine B can be replaced a cost of $55,000 (pald at t=3 ). The replacement machine will produce after-tax cash inflows of $32,000 a year for 3 yoars (inflow recelved at t= 4,5 , and 6 ). The company's cost of capital is 10.5%. What is the net present value (on a 6-year extended basis) of the more profitable machine? a. $23,950 b. $41,656 c. $56,238 d. $62,456 e. $72,687

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