Question
Machines A and B are mutually exclusive and are expected to produce the following real cash flows: Cash Flows ($ thousands) Machine C 0 C
Machines A and B are mutually exclusive and are expected to produce the following real cash flows:
| Cash Flows ($ thousands) | ||||
| Machine | C0 | C1 | C2 | C3 |
| A | 114 | +124 | +135 | |
| B | 76 | +98 | +76 | +74 |
The real opportunity cost of capital is 8%. a. Calculate the NPV of each machine. (Enter your answers in dollars not in thousands. Round your answers to the nearest whole dollar amount.) b. Calculate the equivalent annual cash flow from each machine. (Enter your answers in dollars not in thousands. Round your answers to the nearest whole dollar amount.) c. Which machine should you buy?
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Machine B
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Machine A
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Balancing Acts Unleashing The Power Of Creativity In Your Life And Work
Authors: Daniel Lamarre
1st Edition
1400223024, 978-1400223022
