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Intro Downtown Abbey Corp. wants to buy a new sheep-shearing machine. It has narrowed down the choice to two machines that can do the job
Intro Downtown Abbey Corp. wants to buy a new sheep-shearing machine. It has narrowed down the choice to two machines that can do the job equally well: Machine name Purchase price Useful life (years) Maintenance cost (end of each year) The Shearilizer Naked Sheep 10,000 20,000 4 5 4,000 3,000 The relevant discount rate is 10%. There are no taxes. Part 1 Attempt 1/1 for 10 pts. What is the net present value of all costs associated with the Shearilizer (in absolute terms)? 0+ decimals Submit Part 2 Attempt 1/1 for 10 What is the equivalent annual cost for the Shearilizer (in absolute terms)? 0+ decimals Submit Part 3 Attempt 1/1 for 10 pts. What is the equivalent annual cost for the Naked Sheep (in absolute terms)? 0+ decimals Submit Part 4 Which machine should the company buy? The one with the higher equivalent annual cost The one with the lower equivalent annual cost - Attempt 1/1 for 10 pts. Suomi
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