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Faleye Consulting is deciding which of two computer systems to purchase. It can purchase state-of-the-art equipment (System A) for an after-tax cost of $21,000, which
Faleye Consulting is deciding which of two computer systems to purchase. It can purchase state-of-the-art equipment (System A) for an after-tax cost of $21,000, which will generate after-tax cash flows of $8,000 at the end of each of the next 6 years. Alternatively, the company can purchase equipment with an after-tax cost of $13,000 that can be used for 3 years and will generate after-tax cash flows of $8,000 at the end of each year (System B). If the company's WACC is 10% and both "projects" can be repeated indefinitely, which system should be chosen, and what is its EAA? Do not round intermediate calculations. Round your answer to the nearest cent. \begin{tabular}{|c|} \hline 2,772.51 \\ \hline 13,842.09 \\ \hline 6,894.82 \\ \hline 3,178.25 \\ \hline 7,291.48 \\ \hline \end{tabular}
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