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(7 marks) To save on operating expenses, Beaglicious Dog Food Company. is considering upgrading its...

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(7 marks) To save on operating expenses, Beaglicious Dog Food Company. is considering upgrading its production line. Two different food processing machines - high speed and low speed-are available. Operating revenues and changes to working capital are expected to be the same for both machines. In addition, operating revenues are sufficiently high that the upgrading, regardless of what machine is purchased, is a positive NPV project. Low Speed Processing Machine: The first machine has a lifetime of 10 years. It can be purchased for $20,000 and after 10 years, it will have a salvage value of O. High Speed Processing Machine: The machinery for the second project has a lifetime of 5 years with no salvage value. At the current time the machine costs $11,020. It is anticipated that the cost to purchase the high speed processing machine in 5 years will by $13.900. Beaglicious Dog Food Company's tax rate is 42% and for both machines, CCA on a declining balance can be taken at a rate of 35%. The firm's cost of capital is 12%. Which machine should the firm purchase

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