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Machines A and B are mutually exclusive and are expected to produce the following real cash flows: Machine Cash Flows (5 thousands) C1 C2 -120

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Machines A and B are mutually exclusive and are expected to produce the following real cash flows: Machine Cash Flows (5 thousands) C1 C2 -120 +130 *80 -70 +100 +70 3 +80 The real opportunity cost of capital is 10% a. Calculate the NPV of each machine. (Enter your answers in dollars not in thousands. Round your answers to the dollar amount.) NPV Machine A B b. Calculate the equivalent annual cash flow from each machine (Enter your answers in dollars not in thousands. Rou. answers to the nearest whole dollar amount.) Cash Flow Machine B c. Which machine should you buy? O Machine A O Machine B

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