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Use the following information to determine which machine to purchase based on net present value.
Machine 1 - Initial investment 225,000; Annual cash flows; 50,000 Useful lives; 5 years
Machine 2 - initial investment 235,000; annual cash flows; 50,000 useful lives; 4 years
Machine 3 - initial investment; 210,000; Annual CF; 50,000 Useful lives; 8 years
Cost of Capital is 10%.
A) purchase machine 3
B) purchase machine 2
C) purchase machine 1
D) purchase any of the three machines
E) purchase all three machines
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