Smith Industries Is in Desperate Need of a New Press

Multiple Choice

Smith Industries is in desperate need of a new press machine for their production department. The manager has been asked to select the most favorable option while keeping in mind that any decision made may also impact their department's evaluation. Given this, the manager knows that performing a thorough analysis is crucial. A machine could be purchased from Grove Inc. for a total cost of $9,677 and would generate Operating Income of $3,705. A different machine could be purchased from Forest Inc. for a total cost of $9,003 and would generate Operating Income of $3,432. The company has provided the following information: What is the percentage difference in EVA for the press machine from Grove when compared to the press machine from Forest? (Do not round intermediate calculations.)

A) The EVA of the press machine from Forest is 7.49% higher than the EVA of the press machine from Grove.
B) The EVA of the press machine from Forest is 8.1% higher than the EVA of the press machine from Grove.
C) The EVA of the press machine from Grove is 7.49% higher than the EVA of the press machine from Forest.
D) The EVA of the press machine from Grove is 8.1% higher than the EVA of the press machine from Forest.