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Can you give a detailed explanation please? Dandy & Co. is considering purchasing two machines. Initial investment Annual operating revenues (end of year) Annual expenses
Can you give a detailed explanation please? Dandy & Co. is considering purchasing two machines. Initial investment Annual operating revenues (end of year) Annual expenses (end of year) Terminal salvage value Estimated useful life Minimum desired rate of return Machine A $200.000 $100.000 $25.000 $10,000 5 years 14% Machine B $200.000 $160.000 $85.000 $20,000 5 years 14% Assume straight-line depreciation. Ignore income taxes. a. Calculate the net present value for both machines. b. Assume there are enough funds to purchase both machines. Should both machines be purchased? e. Assume there are funds to purchase only one machine. Which machine should be purchased? Dandy \& Co, is considering purchasing two machines. Assume straight-line depreciation. Ignore income taxes. a. Calculate the net present value for both machines. b. Assume there are enough funds to purchase both machines. Should both machines be purchased? c. Assume there are funds to purchase only one machine. Which machine should be purchased
Can you give a detailed explanation please?
Dandy & Co. is considering purchasing two machines. Initial investment Annual operating revenues (end of year) Annual expenses (end of year) Terminal salvage value Estimated useful life Minimum desired rate of return Machine A $200.000 $100.000 $25.000 $10,000 5 years 14% Machine B $200.000 $160.000 $85.000 $20,000 5 years 14% Assume straight-line depreciation. Ignore income taxes. a. Calculate the net present value for both machines. b. Assume there are enough funds to purchase both machines. Should both machines be purchased? e. Assume there are funds to purchase only one machine. Which machine should be purchased?
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