Question
A firm is must choose to buy the GSU-3300 or the UGA-3000. Both machines make the firms 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 firms production process more efficient which in turn increases incremental cash flows. The GSU-3300 produces incremental cash flows of $25,481.00 per year for 8 years and costs $101,135.00. The UGA-3000 produces incremental cash flows of $27,115.00 per year for 9 years and cost $126,192.00. The firms WACC is 7.72%. What is the equivalent annual annuity of the GSU-3300? Assume that there are no taxes.
Answer format: Currency: Round to: 2 decimal places.
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Managerial Accounting
Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer
12th Edition
9780073526706
