Question
Part 1: A firm is must choose to buy the GSU-3300 or the UGA-3000. Both machines make the firms production process more efficient which in
Part 1: A firm is must choose to buy the GSU-3300 or the UGA-3000. Both machines make the firms production process more efficient which in turn increases incremental cash flows. The GSU-3300 produces incremental cash flows of $25,828.00 per year for 8 years and costs $102,221.00. The UGA-3000 produces incremental cash flows of $27,681.00 per year for 9 years and cost $123,166.00. The firms WACC is 7.30%. What is the equivalent annual annuity of the GSU-3300? Assume that there are no taxes. *round to 2 decimals*
Part 2:
A firm is must choose to buy the GSU-3300 or the UGA-3000. Both machines make the firms production process more efficient which in turn increases incremental cash flows. The GSU-3300 produces incremental cash flows of $26,972.00 per year for 8 years and costs $101,333.00. The UGA-3000 produces incremental cash flows of $28,349.00 per year for 9 years and cost $123,802.00. The firms WACC is 9.26%. What is the equivalent annual annuity of the UGA-3000? Assume that there are no taxes. *Round to 2 decimals*
Thanks in advance!
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