Business, 30.06.2020 18:01 brenton14

Turk Manufacturing is considering purchasing two machines. Each machine costs $9,000 and will produce cash flows as follows:.End of Machine A Machine BYear1 $5,000 $1,0002 $4,000 $2,0003 $2,000 $11,000Turk Manufacturing uses the net present value method to make the decision, and it requires a 15% annual return on its investments. The present value factors of 1 at 15% are: 1 year, 0.8696; 2 years, 0.7561; 3 years, 0.6575. Which machine should Turk purchase and why? Hint: This is a two-part question. Part 1. Make sure you calculate the NPV for both machines and Part 2. Which machine should the company invest in and why? .Check: The NPV for one of the two machines will be a negative number. (3 points)Respond to both parts of this problem on the next page. Part 1. Use the tables below to calculate the Net Present Value for each machine. Machine A Net Cash Flows PV Factor PV of Net Cash FlowsYear 1Year 2Year 3Total Less: Initial Investment Net Present Value Machine B Net Cash Flows PV Factor PV of Net Cash FlowsYear 1Year 2Year 3Total Less: Initial Investment Net Present Value
Part 2. Which machine should the company invest in and why?

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