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Machines A and B are mutually exclusive and are expected to produce the following real cash flows Cash Flows (S thousands) Machine Co C2 C3
Machines A and B are mutually exclusive and are expected to produce the following real cash flows Cash Flows (S thousands) Machine Co C2 C3 +119 +130 129 +119 +130 +142 -109 The real opportunity cost of capital is 8%. 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.) 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 c. Which machine should you buy? Machine A MachineB
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