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Bramble Clinic is considering investing in new heart - monitoring equipment. It has two options. Option A would have an initial lower cost but would
Bramble Clinic is considering investing in new heartmonitoring equipment. It has two options. Option A would have an initial lower cost but would require a significant expenditure for rebuilding after years. Option would require no rebuilding expenditure, but its maintenance costs would be higher. Since the Option B machine is of initial higher quality, it is expected to have a salvage value at the end of its useful life. The following estimates were made of the cash flows. The company's cost of capital is
tableInitial costOption AOption BAnnual cash inflows,$$
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