Answer Happy

Suppose that Sally's Doughnut Shop is considering purchasing one of two machines. Machine A is a dough mixing machine that has a useful life of 3 years. The machine has an initial cost of $100 and cash inflows of $30, and $50, 570 the next three years, respectively, Machine Bis an icing machine with a useful life of 2 years. The machine has an initial cost of $100 and cash inflows of $70 and $60 for the next two years. respectively. Sally's Doughnut Shop has a cost of capital of 10%. What is the NPV of Machine B if the replacement chain method is applied? $33.18 $37.10 $41.48 $52.89