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(a) Choose the best machine based on annual cash flow analysis. The market interest rate is 26% and inflation is 5% Machine-X Machine-Y Initial Cost

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(a) Choose the best machine based on annual cash flow analysis. The market interest rate is 26% and inflation is 5% Machine-X Machine-Y Initial Cost $6,000 $8,000 Annual Maintenance Cost $0 $150 Salvage Value $0 $1,000 Useful Life 5 years 12 years (b) Based on today's economy it is predicted that inflation will escalate to 10% in 2 years. At 15% nominal interest rate, how much a product that costs $125 today will cost in 2 years

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