Philly Company wants to buy a new machine and has narrowed its options to two choices.Both machines cost $160,000.The following data shows the expected cash inflows from each machine:
When calculating net present value,Philly uses the same cost of capital for both machines and both machines have a positive net present value.
Based on this information,which statement is true?
A) Machine 1 and Machine 2 will have the same internal rates of return.
B) Machine 1 and Machine 2 will have the same net present values.
C) Machine 1 will have a lower net present value than Machine 2.
D) Machine 1 will have a higher net present value than Machine 2.
E) None of the answer choices is correct.
Correct Answer:
Verified
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