Saxon Manufacturing is considering purchasing two machines. Each machine costs $10,000 and will produce cash...
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Saxon Manufacturing is considering purchasing two machines. Each machine costs $10,000 and will produce cash flows as shown below. Saxren Manufacturing utes the net present value method to make the decision, and it requires a 15% annual retum on its investments. The present valun factors of 1 at 15% are. 1 year, 0.8695;2 years, 0.7561; 3 years, 0.6575. Which machine should Saxon purchase? Only Machine A 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. Neither machine is acceptable
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