The ABC Company is considering acquiring an automatic screwing machine for its assembly operation of a product. Three different models with varying automatic features are under consideration. The required investments are $360,000 for model A, $380,000 for model B, and $405,000 for model C. All three models are expected to have the same service life of eight years. The financial information from Table 1, in which model (B-A) represents the incremental cash flow determined by subtracting model A’s cash flow from Model B’s, is available. If the firm’s MARR is 12%, which model should be selected?
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