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Business, 15.04.2021 17:50 Jazminnexoxo1093

Bluesky is analyzing two machines to determine which one it should purchase. Whichever machine is purchased will be replaced at the end of its useful life. The company requires a 12 percent rate of return and uses straight-line depreciation to a zero book value over the life of the machine. Machine A has a cost of $302,000, annual operating costs of $18,000, and a 3-year life. Machine B costs $220,000, has annual operating costs of $22,000, and a 2-year life. The firm currently pays no taxes. Which machine should be purchased and why

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