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Business, 19.10.2019 04:30 cicimarie2018

Bruno's is analyzing two machines to determine which one it should purchase. the company requires a rate of return of 14.6 percent and uses straight-line depreciation to a zero book value over a machine's life. ignore bonus depreciation and taxes. machine a has a cost of $318,000, annual operating costs of $8,700, and a life of 3 years. machine b costs $247,000, has annual operating costs of $9,300, and a life of 2 years. whichever machine is purchased will be replaced at the end of its useful life. which machine should bruno's purchase and why?

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