Question
A firm is must choose to buy the GSU-3300 or the UGA-3000. Both machines make the firm's production process more efficient which in turn increases
A firm is must choose to buy the GSU-3300 or the UGA-3000. Both machines make the firm's production process more efficient which in turn increases incremental cash flows. The GSU-3300 produces incremental cash flows of $24,048.00 per year for 8 years and costs $102,464.00. The UGA-3000 produces incremental cash flows of $27,915.00 per year for 9 years and cost $125,710.00. The firm's WACC is 9.90%. What is the equivalent annual annuity of the GSU-3300? Assume that there are no taxes.
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Managerial economics
Authors: william f. samuelson stephen g. marks
7th edition
9781118214183, 1118041585, 1118214188, 978-1118041581
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