34. Replacement decisions (S6.4) You are operating an old machine that is expected to produce a cash
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34. Replacement decisions (S6.4) You are operating an old machine that is expected to produce a cash inflow of $5,000 in each of the next three years before it fails. You can replace it now with a new machine that costs $20,000 but is much more efficient and will provide a cash flow of $10,000 a year for four years. Should you replace your equipment now? The discount rate is 15%.
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Principles Of Corporate Finance
ISBN: 9781264080946
14th Edition
Authors: Richard Brealey, Stewart Myers, Franklin Allen, Alex Edmans
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