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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 cosk of $25,000, 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 cosk of $25,000, which wilf generate after-tax cash flows of $7,000 at the end of each of the next 6 years. Alternatively, the company can purchase equipment with an after-tax cost of $12,000 that ean be. used for 3 years and will generate after-tax cash fows of 57,000 at the end of each year (System 8). If the company's wacc is 105 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. Cheose Project whose EAA =5
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