You need to purchase a machine for your start-ups. You require a 15% rate of...
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You need to purchase a machine for your start-ups. You require a 15% rate of return and uses straight-line depreciation to a zero-book value. Machine A has a cost of $400,000, annual operating costs of $8,000, and a 4-year life. Machine B costs $320,000, has annual operating costs of $12,000, and has a 3-year life. Whichever machine is purchased will be replaced at the end of its useful life. Which machine should you purchase and why? (Round your answer to whole dollars. Ignore any tax effect or depreciation effect)
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