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7. Machine B is expected to produce the following real cash flows: Cash Flows ($ thousands) Machine C1 C2 C3 B -121 111 122 134
7. Machine B is expected to produce the following real cash flows: Cash Flows ($ thousands) Machine C1 C2 C3 B -121 111 122 134 Machine C was purchased five years ago for $200,000 and produces an annual real cash flow of $75,000. It has no salvage value but is expected to last another five years. The company can replace machine C with machine B either now or at the end of five years. The opportunity cost of capital is 11%. When should the company replace machine C, now or 5 years later
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