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Unequal

liveslong dash—ANPV

approach???Evans Industries wishes to select the best of threepossible? machines, each of which is expected to satisfy the?firm's ongoing need for additional? aluminum-extrusion capacity.The three

machineslong dash—?A,

?B, and

Clong dash—are

equally risky. The firm plans to use a cost of capital of

12.3 %

to evaluate each of them. The initial investment and annual cashinflows over the life of each machine are shown in the followingtable.???(Click on the icon located on the? top-right corner of thedata table below in order to copy its contents into a?spreadsheet.)

	Machine A	Machine B	Machine C
Initial investment ?(CF 0CF0?)	?$92 comma 60092,600	?$64 comma 40064,400	?$101 comma 200101,200
Year ?(tt ?)	Cash inflows ?(CF Subscript tCFt?)
1	?$12 comma 20012,200	?$9 comma 0009,000	?$29 comma 70029,700
2	??12 comma 20012,200	??19 comma 30019,300	??29 comma 70029,700
3	??12 comma 20012,200	??29 comma 70029,700	??29 comma 70029,700
4	??12 comma 20012,200	??40 comma 80040,800	??29 comma 70029,700
5	??12 comma 20012,200	???????long dash—	??29 comma 70029,700
6	??12 comma 20012,200	???????long dash—	???????long dash—

a. Calculate the NPV for each machine over its life. Rank themachines in descending order on the basis of NPV.

b. Use the annualized net present value? (ANPV) approach toevaluate and rank the machines in descending order on the basis ofANPV.

c. Compare and contrast your findings in parts

?(a?)

and

?(b?).

Which machine would you recommend that the firm? acquire?