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 $25,924.00 per year for 8 years and costs $102,716.00. The UGA-3000 produces incremental cash flows of $29,487.00 per year for 9 years and cost $125,614.00. The firms WACC is 7.40%. What is the equivalent annual annuity of the GSU-3300?
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 $24,975.00 per year for 8 years and costs $99,722.00. The UGA-3000 produces incremental cash flows of $29,690.00 per year for 9 years and cost $123,614.00. The firms WACC is 7.69%. What is the equivalent annual annuity of the UGA-3000?
Thanks in advance!
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