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Starliper Industries has developed a project to produce a new product: Widgets. To develop the widgets, Starliper Industries needs to purchase a new machine that will help develop the widgets. Starliper Industries is deciding between two different machines, New Tech and Standard Classic that have the capabilities necessary to develop the widgets. Your job will be to compare the two different machines using net present value. The company has produced the following information regarding the widgets and the two machines: Which machine you believe Starliper Industries should purchase and a short explanation backing that decision.*

New tech:

	Total Contribution Margin		$ 300,000	$ 315,000	$ 380,000	$ 440,000	$ 440,000	$ 440,000
	Total Other Fixed Costs		$ (160,000)	$ (160,000)	$ (150,000)	$ (120,000)	$ (120,000)	$ (120,000)
	Yearly Maintenance Cost		$ (50,000)	$ (50,000)	$ (50,000)	$ (50,000)	$ (50,000)	$ (50,000)
	Discounted CF (Optional)		76291.23	78226.82	113249.30	148269.32	133575.96	185030.24
	Net Present Value	$ 218,643
	Project Profitability Index	0.42

Standard Classic

Total Contribution Margin		275,000	290,000	375,000	420,000	420,000	420,000
Total Other Fixed Costs		(160,000)	(160,000)	(150,000)	(120,000)	(120,000)	(120,000)
Tax Shield		8,617	8,617	8,617	8,617	8,617	8,617
Total Cash Flows	(303,000)	42,157	53,857	42,157	186,457	186,457	254,457
Discounted CF (Optional)		$37,979.05	$43,711.34	$30,824.64	$122,824.83	$110,653.00	$136,042.96
Net Present Value	179,036
Project Profitability Index	0.59

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