9.1 Remember, discount cash flows, not profits. Each tewgit machine costs $250,000 right away. Recognize that outlay,
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9.1 Remember, discount cash flows, not profits. Each tewgit machine costs $250,000 right away. Recognize that outlay, but forget accounting depreciation. Cash flows per machine are:
Each machine is forecast to generate $50,000 of cash flow in years 4 and 5. Thus it makes sense to keep operating for 5 years.
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Related Book For
Fundamentals Of Corporate Finance
ISBN: 9780073382302
6th Edition
Authors: Richard A Brealey, Stewart C Myers, Alan J Marcus
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