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Machines A and B are mutually exclusive and are expected to produce the following real cash flows Cash Flows ($ thousands) Machine Co -106 -126

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Machines A and B are mutually exclusive and are expected to produce the following real cash flows Cash Flows ($ thousands) Machine Co -106 -126 +116 +116 +127 +127 +139 The real opportunity cost of capital is 11% a. Calculate the NPV of each machine. (Do not round intermediate calculations. Enter your answers in dollars not in thousands, e.g 123,456. Round your answers to the nearest whole dollar amount.) Machine NPV b. Calculate the equivalent annual cash flow from each machine. (Do not round intermediate calculations. Enter your answers in dollars not in thousands, e.g. 123,456. Round your answers to the nearest whole dollar amount.) Machine Cash Flow c. Which machine should you buy? Machine A Machine B

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