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Machines A and B are mutually exclusive and are expected to produce the following real cash flows: C3 Machine A B Cash Flows ($ thousands)
Machines A and B are mutually exclusive and are expected to produce the following real cash flows: C3 Machine A B Cash Flows ($ thousands) (1 C2 -106 +116 +127 -126 +116 +127 +139 The real opportunity cost of capital is 11%. a. Calculate the NPV of each machine. (Enter your answers in dollars not in thousands. Round your answers to the nearest whole dollar amount.) NPV Machine B 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.) Machine Cash Flow B c. Which machine should you buy? Machine A O Machine B
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