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
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 $24,094.00 per year for 8 years and costs $101,545.00. The UGA-3000 produces incremental cash flows of $29,502.00 per year for 9 years and cost $126,214.00. The firm's WACC is 8.50%. What is the equivalent annual annuity of the UGA-3000? Assume that there are no taxes.
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Economics
Authors: R. Glenn Hubbard
6th edition
978-0134797731, 134797736, 978-0134106243
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