Spindle indexer help please

[Saracen]

That diagram is still wrong. The LEDs should be powered continuously. It is the transistors which are generating the signals on the blue and red leads.

When the solid part of the disc is between the LED and the transistor, there is no light reaching the transistor, so it does not conduct. This allows the red/blue wires will be pulled high by the BOB.
When the gap in the disc comes round, the light from the LED passes through it, hits the transistor and it switches on. This pulls the red/blue wire to ground, generating the pulse needed.

> What would you recommend the supply voltage ??

The Boxford circuit diagram appears to show the sensors powered by 10V, so the sensors should have resistors for that supply already.

> How do I configure MAch3 turn to read both these signals ?

Sorry, I've never used Mach3 so cannot say.