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Our company is considering the purchase of new production equipment and we have two options. Each option requires an initial investment of $38,000. The following
Our company is considering the purchase of new production equipment and we have two options. Each option requires an initial investment of $38,000. The following data shows the expected cash inflows from each machine: Year Option #1 Option #2 1 $40,000 $120,000 2 40,000 0 3 40,000 0 When figuring net present value, the company uses the same cost of capital for both options and both
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