Saxon Manufacturing is considering purchasing two machines. Each machine costs $9,000 and will produce cash flows as follows: Alpha Bravo Year 1 $5,000 $1,000 Year 2 4,000 2,000 Year 3 2,000 11,000 Saxon Manufacturing uses the net present value method to make the decision and it requires a 15% annual return on its investments. Which machine should Saxon purchase?
A. Only Alpha is acceptable.
B. Only Bravo is acceptable.
C. Both machines are acceptable, but Alpha should be selected because it has the greater net present value than Bravo.
D. Both machines are acceptable, but Bravo should be selected because it has the greater net present value than Alpha. E. Neither machine is acceptable.