=+1 Trinh wants to evaluate the new X-ray machine using capital budgeting techniques, but does not know how to begin. To help her, read through the problem and separate the cash flows into four groups:

(a) net initial investment cash flows;

(b) cash flow savings from operations;

(c) cash flows from terminal disposal of investment; and

(d) cash flows not relevant to the capital budgeting problem.

722 Chapter 18: Capital budgeting and cost analysis M18_HORN3377_02_LT_C18.indd 722 2/09/13 4:03 PM