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Orange Inc. is considering the following two investment options: 1 . To purchase a band saw that costs $ 6 0 , 0 0 0

Orange Inc. is considering the following two investment options:
1. To purchase a band saw that costs $60,000 and which will generate $12,000 per
year of net cash flow.
2. The purchase of a conveyor system for $39,000, which will reduce transport costs
by $13,000 per year.
Which option should Orange Inc. choose if it has sufficient funds to invest in one of
these projects?

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