Machine X costs $50,000 and is forecast to generate an annual profit of $16,000 for five years. Machine Y, priced at $72,000, will produce the same annual profits for 10 years. The trade-in value of X after five years is expected to be $10,000, and the resale value of Y after 10 years is also thought to be $10,000. If either machine satisfies the firm's requirements, which one should be selected? Use a required return of 14%.

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The Answer of Machine X costs $50,000 and is forecast to generate an annual profit of $16,000 for five years. Machine Y, priced at $72,000, will produce the same annual profits for 10 years. The trade-in value of X after five years is expected to be $10,000, and the resale value of Y after 10 years is also thought to be $10,000. If either machine satisfies the firm's requirements, which one should be selected? Use a required return of 14%.

Machine X Costs $50,000 and Is Forecast to Generate an Annual