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Machine A costs $850,000 and would produce cash flows of $220,000 per year for the first two years, $350,000 per year for the next two

Machine A costs $850,000 and would produce cash flows of $220,000 per year for the first two years, $350,000 per year for the next two years, and $150,000 in the final year. Machine B costs $650,000 and would produce cash flows of $250,000 per year for the first two years, $200,000 the following year, $150,000 in its fourth year, and $140,000 in its final year. Your required return is 11%. What is the NPV of buying machine B?

  • A. $106,261.94

  • B. $340,000.00

  • C. $112,196.46

  • D. $1,406,261.94

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