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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 $26,619.00 per year for 8 years and costs $102,144.00. The UGA-3000 produces incremental cash flows of $27,785.00 per year for 9 years and cost $125,004.00. The firms WACC is 9.86%. What is the equivalent annual annuity of the GSU-3300? Assume that there are no taxes.
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