Evaluate two machines-determines that they have costs shown

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Tim Smunt has been asked to evaluate two machines. After some investigation, he determines that they have the costs shown in the following table.

Machine A Machine B

Original Cost $12,000 $28,000

Labor per Year $2,200 $4,800

Maintenance per yr $ 4,300 $800

Salvage Value $ 2,400 $7,000

He is told to assume that:

1. The life of each machine is 3 years.

2. The company thinks it knows how to make 12% on investments no more risky than this one.

3. Labor and maintenance are paid at the end of the year.

The NPV for Machine B=$

Reference no: EM13844843

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