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Anwer the 3 parts please! Unequal Lives The Perez Company has the opportunity to invest in one of two mutually exclusive machines that will produce
Anwer the 3 parts please!
Unequal Lives The Perez Company has the opportunity to invest in one of two mutually exclusive machines that will produce a product it will need for the foreseeable futare. Machine A costs $9 million but realizes after-tax inflows of $3.5 million per year for 4 years. After 4 years, the machine must be replaced. Machine B cost 514 million and realizes alter-tax inflows of $3 million per year for years, after which it must be replaced. Assume that machine prices are not expected to nse because inflation will be onset by cheaper components used in the machines. The cost of capital is 8%. Using the replacement choin approach to project analysis, by how much would the value of the company increase if it accepted the better machine? Do not round intermediate calculations. Enter your answer in millions. For example, an answer of $1.23 million should be entered as 1.23, not 1,230,000. Round your answer to two decimal places 5 million What is the equivalent annual annuity for each machine? Do not round intermediate calculations, Enter your answers in millions. For example, an answer of 51.23 milioni should be entered as 1.23, not 1,230,000. Round your answers to two decimal places Machines milion Machine 3:5 million Step by Step Solution
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